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From The Conversation. A memo on the subject of housing taxation from the Reserve Bank of Australia (RBA) is stirring up debate on proposed changes to negative gearing and capital gains tax in the election campaign. The memo, dated December 9 2014, does counter the government’s claim that changes to negative gearing will have an … Continue reading “What the Reserve Bank memo really says about negative gearing”
Under a freedom of information request, the RBA has just released some material which casts light on their perspective on investment property and negative gearing from the Financial System Inquiry. There are a few interesting points. Whilst tax reform is an issue for Government, the RBA has noted that concessional rates of taxation of capital … Continue reading “RBA FOI on Negative Gearing and Investment Properties”
Long overdue changes to negative gearing and capital gains tax would save the Commonwealth Government about $5.3 billion a year, according to a new Grattan Institute report. Hot property: negative gearing and capital gains tax reform shows that the interaction of a fifty per cent capital gains tax discount with negative gearing distorts investment decisions, … Continue reading “Grattan Institute Defends Negative Gearing Reform”
From Business Insider. Australian prime minister Malcolm Turnbull has taken negative changes off the table for the May budget. The announcement was made at a doorstop in Sydney this morning by Turnbull and treasurer Scott Morrison who noted that the federal government “had the common sense to leave the system as it is”. They criticised … Continue reading “Negative Gearing IS Off The Budget Table”
From The Conversation. Negative gearing and capital gains tax are a looming battleground in the federal election. The debate was heightened last month by the release of modelling by consultants BIS Shrapnel purporting to show that reforms would lead to rent increases of between 4% and 10%. If correct, this would scare any political party. … Continue reading “Why it is good policy, not bad politics, to ignore bad modelling on negative gearing”
From Australian Broker. Sydney’s housing affordability crisis is being artificially exacerbated by “lunacy” tax incentives, a new report has claimed. According to the analysis by the UNSW’s City Futures Research Centre, up to 90,000 properties are sitting empty in some of Sydney’s most sought-after suburbs as investors chase capital gains over rental returns. The analysis’ … Continue reading “Negative gearing distorting Sydney housing market: Report”
From The Conversation. There is much confusion about the effects of Labor’s tax proposals with respect to investors in rental housing. They propose to grandfather existing arrangements. But investors in the future can only negatively gear newly constructed housing, while the policy recommends the capital gains discount fall from 50% to 25%. Claims by Prime … Continue reading “Will house prices ‘collapse’ if negative gearing is changed?”
Labor have announced proposals to change the negative gearing and capital gains tax rules relating to property investments. In an interview today on ABC Insiders, Chris Bowen, Shadow Treasurer said that negative gearing would potentially only be available on new property in 2017 , currently half of the benefit goes to top income earners, and … Continue reading “Fact Check On Negative Gearing, Using DFA Data”
From The Conversation. Average income earners largely are the people who do get to take advantage of negative gearing – nurses, policemen and women on an average wage, investing, for instance, in a property. Most of them hold only one property, which adds to the housing stock that’s available for people as well. – Assistant … Continue reading “FactCheck: are average earners the main beneficiaries of negative gearing?”
In the RBA’s submission to the Inquiry on Home Ownership, they argue that negative gearing for investment property should be reviewed, because it has the potential to raise risks in the market, lift prices and distort the market. Housing, particularly owner-‐occupied housing, receives preferential taxation treatment in many countries, and Australia is no exception. Australia’s … Continue reading “RBA Says Negative Gearing Should Be Reviewed”