Messing with negative gearing would introduce distortions into the tax system and attack confidence.
The arguments for removing negative gearing don't stack up. Negative gearing and CGT are doing all the right things when it comes to improving housing affordability. They increase supply, give people an opportunity to get into the housing market and help Australians build wealth for their future.
The real barrier to home ownership is the run-away stamp duty costs which have increased significantly over the last 20 years. There has been no adjustment for bracket creep as houses prices have risen and the state government has become too reliant on this volatile revenue stream.
Mum and dad investors are overwhelmingly the ones who benefit most for the ability to negatively gear their property investments. It’s not a tax lurk for the wealthy, but an incentive for people on average incomes.
REIWA believes that messing with negative gearing would introduce distortions into the tax system and attack confidence. This would run counter to the principles of simplicity and fairness that the Federal Government is seeking to achieve in the current review of the taxation system.