Responding to the recent announcement by the Leader of the Opposition, Bill Shorten, that there would be no decisions made regarding changes to existing negative gearing and capital gains taxation arrangements until after the federal election, the Real Estate Institute of Australia (REIA) asks whether this is because the ALP doesn’t want any voter backlash in the lead up to the election.
“All Australians need to know what and when a Labor Government, if elected, will do regarding property taxation. It is not acceptable to appear to be ‘having a couple of bob each way’ in the lead up to the election,” REIA President Adrian Kelly said.
Under the previously announced ALP taxation policies these are the losers:
1. Mum and dad investors who want to buy an existing investment property to supplement their retirement savings will no longer be able to claim a modest taxation deduction. Contrast this to the ALP proposal to allow a twenty per cent instant asset write-off for capital expenditure above $20,000 for big business.
2. Home owners who will see additional downward pressure on home prices in an already falling market
3. Renters who will see their rents rise just as they did under the Hawke/Keating experiment in the 1980’s. Contast this to the current situation where we have the lowest annual increase in rents for two decades.
4. Builders and their ‘tradies’ who will build less houses as shown by independent research undertaken for the Master Builders Association last year.
5. State governments and their constituents who will receive less stamp duty to spend on much needed infrastructure.
“REIA welcomes the promise to consult but let’s do that now, not after the election, and let’s look at all property taxes in a holistic approach and not just negative gearing and capital gains tax as if that’s the panacea to housing affordability.
“There is already enough market uncertainty particularly in the larger states and a “nothing to see here” approach will only exacerbate this uncertainty.
“The ALP needs to come clean with what its election policies actually are so that all Australians – including the nearly 100,000 real estate businesses across Australia together with their employees and families – know exactly what they will be voting for and can make an informed decision at the ballot box,” concluded Mr Kelly.