CERTAINTY ON NEGATIVE GEARING A BOOST FOR HOUSING AFFORDABILITY
16 April 2015
Certainty on negative gearing a boost for housing affordability
The Property Council of Australia welcomes comments by the Prime Minister today ruling out any changes to negative gearing.
Executive Director, Nick Proud, said providing certainty on the future of this tax measure will benefit housing affordability and give average workers who invest in property confidence.
“The data is conclusive – negative gearing in Australia is primarily used by average workers who in the majority, own only one investment property,” Mr Proud said.
“It is great to see the Federal Government providing certainty for the hundreds of thousands of average workers whose modest investments are contributing to housing supply and rental affordability.
“There is no evidence to suggest that negative gearing drives up house prices – the opposite is true.
“As all parties recognise, the key to making houses more affordable is to increase the supply of new housing stock to better meet demand.
“New housing supply needs capital to get off the ground, and investors (both foreign and domestic) as well as owner occupiers are a critical source of that capital. Negative gearing unlocks an important source of finance to boost new supply.
“With an ageing population we need to look at ways of taking pressure off the budget and negative gearing is one way for average workers to save for their retirement.
“It also helps encourage young Australians and first homeowners to take their first step into the property market by providing what can be a more economical option – purchasing initially as an investment rather than as an owner occupier.
“We have seen some fanciful figures bandied around on negative gearing which seek to distort the fundamental benefits of this tax measure for the majority of Australians.
“The ATO Tax Statistics clearly show that of the almost 1.26 million Australians who declare a net rental loss, 883,325 people earn around $80,000 per annum or less and around 79 per cent of them negatively gear.
“Suggestions that 30 per cent, or 561,000 people, with a geared property earn over $500,000 don’t stack up.
“The figures just don’t add up when we know that 1.87 million Australians declared a net rental interest in 2011/12 and that 1.34 million of those earn around $80,000 per annum or less.”
Media contact: Fiona Benson | M 0407 294 620 | E firstname.lastname@example.org