Labor's proposed changes 'adding to market uncertainty', says REIA
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Jan 14, 2019
Labor's proposed changes 'adding to market uncertainty', says REIA
The Real Estate Institute of Australia has described Labor's proposed changes to negative gearing and capital gains tax as "dangerous".
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Neil RichardsonOpposition Leader Bill Shorten
Labor's plan for negative gearing and capital gains tax has drawn criticism from the Real Estate Institute of Australia, with President Adrian Kelly saying the party has "backed itself into a corner".
Opposition Leader Bill Shorten vowed to reform negative gearing if elected in this year's federal election, also promising to half the 50 per cent deduction on capital gains allowed across asset sales.
Speaking to WILLIAMS MEDIA, Mr Kelly accused Labor of playing politics with what should be policy.
Labor's proposed changes - at a glance
- Negative gearing reform.
- Halving the 50 per cent deduction on capital gains allowed across asset sales.
- Policy to take effect at yet-to-be-confirmed date.
"Instead of sitting down with all the major stakeholders and discussing what the best course of action is, they have turned it into an election issue," he said.
"What's happening at the moment is that there is a whole lot of uncertainty being created, and while everyone seems to have an opinion on what is going to happen, no one really knows.
"This is why we are looking forward to sitting down with all the parties between now and the election."
REIA President Adrian Kelly. Source: REIA
In a statement on its website, Labor points to the decline of ownership rates for young people aged 25-34, which it says has gone from 60 per cent to 48 per cent in recent years, as the catalyst for the plan.
The party is yet to confirm exactly when the proposed reforms will come into effect.
Mr Kelly said Mr Shorten would do well to learn from what happened the last time a Labor government altered negative gearing.
"The one thing that is for certain is the effect that negative gearing changes had when they were introduced by the Hawke/Keating government during the 80s," he said.
"After they removed it, rents went through the roof, forcing them to reinstate six months later.
"Negative gearing as part of taxation policy hasn't really been an issue for the past three decades, so to start mucking around with it now to grab some votes is potentially very dangerous".
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