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Could Labor policy ‘take a big stick to the value of your home’?
With the major parties having outlined their policies on negative gearing and capital gains tax, it’s important not to lose sight of the bigger picture in the run up to the next Federal election.
“I’m reluctant to say that truth will be the first casualty but the debate already appears in danger of descending into claim and counter claim,” says First National Real Estate’s chief executive, Ray Ellis.
“Each side of politics will seize upon the various aspects of economic modeling put forward concerning negative gearing. However, during this process, it is important that we don’t lose sight of the fundamentally positive effects of the current negative gearing and capital gains tax regime on the economy”.
Current arrangements make buying a rental property an attractive method to build wealth and save for retirement for over two million ordinary Australians. These citizens are then better positioned to support themselves in retirement, reducing their reliance on government pensions.
The existing regime also contributes to a broad community benefit by underpinning the supply of affordable rental properties, reducing pressure on government to fund and build public housing.
While it has been claimed that an elite group are the main beneficiaries of current negative gearing policy, many more average workers enjoy the benefits and contribute to the community in the process. These days, young people are also buying their first property as an investment instead of a home.
Negative gearing is the millennial generation’s way of getting a foot on the property ladder and managing the challenge of affordability.
‘There would need to be a significant fall in house prices to offset the current policy that helps them get into the market’ says Mr Ellis.
Prime Minister, Scott Morrison has claimed that Labor’s policy on negative gearing will have a significant impact on an already declining market. “Labor will take a big stick to the values of your home. This is what they will do as a result of abolishing negative gearing and increasing the capital gains tax”.
For more information about negative gearing during the federal election campaign, visit the media section of First National Real Estate’s national website where you will fin updates and a running commentary.
Could Labor policy ‘take a big stick to the value of your home’? palmbeachfn.com.au November 2018 First National Palm Beach
by Celine Battendier
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