Tax reform will be firmly on the new Turnbull Government’s agenda to grow the economy, and Shelter WA will be lobbying for changes to negative gearing.
Mr Turnbull said on the 7.30 Report last night that he would be looking at tax reform as part of measures to get the Australian economy moving again.
Being just his first week as the new Prime Minister, he didn’t go deep into detail on which taxes would be looked at, but according to Shelter WA who are lobbying for housing affordability, negative gearing should be restricted to new-homes and capped on expensive properties to stop the very wealthy from exploiting the tax allowance.
Shelter WA executive officer Chantal Robertson said they are soon to submit to the Turnbull Government a tax green paper recommending negative gearing be reduced to non-established, affordable properties.
“Negative gearing is increasing the number of investors in the market and is hurting affordability,” Ms Robertson told News.com.
“By limiting negative gearing to affordable properties, it would ensure the number of rentals on the market would not decrease and make it easier for ordinary people to access housing.”
There have been submissions in the past recommending negative gearing be scrapped entirely, but limiting it to new-build homes could be a compromise that works.
Property Council WA chief executive Joe Lenzo disagreed with the idea when he also spoke to News.com.
“Research shows the majority of those using negative gearing are mum-and-dad investors with incomes of $80,000 or under, not the super-rich,” Mr Lenzo said.
“While there may be a few big-scale investors using it, they are in the minority.”
“Negative gearing is a very efficient tax, which helps make renting more affordable.”
Economists in the property sector certainly are divided on the issue, and Opposition Leader Bill Shorten has already said earlier this year that Labor was to set up a think tank to consider ways of limiting negative gearing.
Time will tell whether the Turnbull Government will heed Shelter WA’s green paper proposals and include changes to negative gearing as part of its tax reform measures in the coming months.