Government Must Retain Negative Gearing

In its pre-budget submission, the Real Estate Institute of Australia (REIA) has urged the Government to retain negative gearing to encourage property investment and place downward pressure on rents.

REIA CEO, Amanda Lynch says, “The evidence is clear that both negative gearing and the capital gains tax discount (CGT) feed the supply-side pipeline at a time of a chronic under-supply of houses in Australia.”

“Any alteration to the current arrangements would likely result in a need for a greater investment by the Government in social housing and could potentially increase rents – as recognised by the Henry Tax Review in 2010, which stated that the current provisions placed downward pressure on rents.

REIA’s Pre-Budget Submission highlights eight recommendations aimed at contributing to Australia’s continuing economic development and productivity while attracting first home buyers back into the property market and improving housing affordability.

For the 2015/16 Budget, REIA seeks the Commonwealth Government’s consideration of the following:

• That conveyance stamp duties be abolished and replaced by an efficient source of revenue for states and territories.
• That negative gearing be retained in its current form to encourage property investment.
• That capital gains tax on property investments is not increased.
• That the Government take a leadership role in introducing a uniformed approach to the provision of assistance to first home buyers for both new and established homes.
• That the Government establish a scheme to encourage young Australians to have access to their superannuation for the purpose of raising a deposit for a first home.
• That the Government establish a mechanism to ensure the availability of reliable data on housing demand and supply to assist in formulating effective policies.
• That the Government continue to fund the Industry Skills Fund to meet all skills shortages.
• The Government better utilize private investment to improve the supply of housing for social housing tenants transitioning to private rental.

REIA’s pre-budget submission can be found here .