Opposition warned on negative gearing changes
Labor's proposed policy changes to negative gearing are based on inadequate economic modelling and should not be changed in isolation without a comprehensive review of the taxation policy.
That was the call from the peak body of the property industry, the Property Investment Professionals of Australia (PIPA), which said $6.5 trillion worth of Australians' wealth was in property, which was around three times the amount held in superannuation and equities.
The body's chair, Ben Kingsley, said: "Don't play with this unless you know what you're doing. Such major reform requires comprehensive and detailed modelling. Until there is real evidence to support such a policy, which industry experience tells us doesn't exist, the opposition should be very careful about changing negative gearing and capital gains tax provisions".
Kingsley said property investment contributed to self-sufficient retirees and reduced reliance on the Government to support an ageing population, while also providing one in four jobs.
"Labor's proposed removal of negative gearing on established housing is a poorly-informed policy that will drive property price reductions, increase rents, stifle new property construction, rather than encourage it and cause job losses.
"Is that a good policy?" he asked.
Tax agency business, H&R Block, pointed to Australian Taxation Office (ATO) figures in February, which showed that 72 per cent of investors with negatively geared properties earned $80,000 or less (2011-12 figures), and argued the removal of negative gearing would hit many middle income families who would have to sell their property as their tax bills rose.
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