The Housing Industry Association says research shows targeting negative gearing would take its toll on housing investment, affordability and rental pressure.
“Independent research has found that changing residential negative gearing would reduce housing affordability, and under the current housing policy settings, would lower Australian living standards,” The Housing Industry Association’s executive director, industry policy and media, Graham Wolfe, has said.
“New housing is one of the most highly taxed sectors in the economy, and the removal of negative gearing would only make that situation worse and discourage investment.”
Wolfe said with negative gearing, housing supply would be reduced and rental costs would increase.
“It is important to remember that negative gearing is not the domain of so-called ‘wealthy investors’.
“Official taxation statistics for 2011/12 show that over 79 per cent of those with a rental investment property have a total income less than $100,000 and around three quarters earn less than $80,000.”
Wolfe said it was most important to abolish stamp duty on residential property conveyances, resulting in more affordable housing for renters and owner-occupiers.
“Negative gearing promotes private investment in the rental market, thus stimulating economic activity and taking the pressure off social housing and the public purse.”
“With an ageing workforce and future pressure on services, policy settings such as negative gearing that promote wealth creation and self-sufficiency in retirement should be promoted.”
“Private investment in residential property should not be seen as a cash cow to fund the supply of affordable housing,” Wolfe said.