Labor’s negative gearing and capital gains tax policy favours high income families, says Neville Sanders of the Real Estate Institute of Australia.

“The proposal is that losses from new investments in shares and existing properties can still be used to offset investment income tax liabilities and that these losses can also continue to be carried forward to offset the final capital gain on the investment,” explained Neville Sanders, President of the Real Estate Institute of Australia.

“The irony is that this policy actually favours the wealthy, who will have other investment income to offset against negative gearing losses.

“Nurses, school teachers, electricians and office managers, who make up over half of the top ten occupations using negative gearing, will generally only have salary and wages income and thus not be able to offset the losses,” he said.

“It proposes to slug mum and dad investors with one property saving for their retirement, whilst the wealthy with a large and diversified portfolio will remain unaffected,” he said.

Sanders said negative gearing contributes to equity in the Australian tax system because it provides those on lower income to invest in property, when they might otherwise not have been able to.

“The availability of negative gearing highlights the equity of the Australian taxation system and has provided many on lower incomes with the opportunity to invest in property which they otherwise would not have had,” said Sanders.

www.negativegearingaffectsyou.com

See also:

The Opposition and negative gearing

Survey reveals negative gearing benefits everyday West Aussies

Economy cannot withstand Labor's experiment with negative gearing

Changing negative gearing would impact rents

Why negative gearing is important to renters

Changes to negative gearing not the answer to housing affordability

Look to 1985 for negative gearing impact, says John Howard