The Urban Development Institute of Australia (UDIA) has expressed concern over the Opposition’s continued push for changes to negative gearing and capital gains tax, labelling it as a demand-side measure when governments should be concentrating on the supply-side.
UDIA National President Michael Corcoran said: “We agree with the Shadow Treasurer, Mr Bowen, that we are at a crisis point for housing affordability, but respectfully, we disagree with the Opposition’s proposed solution.
“For too long, governments and opposition have looked to failed demand-side for solutions to the complex problem of housing affordability – from subsidies for first home buyers to increased taxes on foreign buyers.
“Removing negative gearing from established property investment, while doubling the capital gains tax on all investments is effectively a double-whammy new property tax, which will do nothing to address the real problem which is an undersupply of dwellings.
“The reality is, the population is growing and we are getting further behind. This is particularly the case in Sydney, but also in Melbourne and Brisbane.
“As we said during the election campaign, restricting negative gearing and doubling the capital gains tax will result in rental spikes, cause falls in the value of the family home and reduce the supply of needed rental housing which is derived from both established and new housing stocks.
“Quarantining negative gearing to new homes only creates distortions in the tax system. Any discussions around negative gearing and capital gains tax cannot be held in isolation and should only be had as part of a broader debate around tax reform.
“If governments are serious about tackling affordability they should be targeting supply constraints - better planning systems, a steady and transparent release of new zoned and serviced land, less red tape, and more investment in transport and enabling infrastructure.
“The election campaign should have sorted this out once and for all."
