The property industry has welcomed the Federal Government's decision not to make any changes to negative gearing or the assessment of Capital Gains Tax.
The property Council of Australia (PCA) said the announcement was good news for Australia’s two million owners of investment property.
“This is a good decision for the two million Australians who own an investment property and the 1.1 million Australians who are employed in the property industry”, said Ken Morrison, Chief Executive of the Property Council of Australia.
“This decision is economically responsible and recognises the important role property is playing in Australia’s economic transition.
“The Government is doing the right thing by the 1.2 million Australians who negative gear. This includes over 770,000 Australians who have taxable incomes of less than $80,000 a year.
“Australians understand that owning a property is a way they can secure their financial future. Owning a property means financial security and independence – this is what we should be encouraging.
The Urban taskforce said it was a positive for the housing market.
“Despite much recent debate about the potential to restrict negative gearing to only new housing and to make capital gains less attractive it is good news that the Federal Government has retained the status quo,” says the Urban Taskforce.
“The new housing market is currently slowing down through restrictions on lending by banks and it is essential that investor confidence in new housing, particularly in apartments, is maintained.
“Australia as one of the most urbanised countries in the world is moving more towards a stronger rental market as other major cities in the world currently have. A stronger rental market comes with urban density with apartments close to public transport nodes and this rental market clearly needs investors to deliver new apartments. Australia’s economic support of investment in rental housing through negative gearing and attractive capital gains is essential to maintain the necessary stock of rental housing.
“Many families in Australia have invested in an investment property as part of managing their build-up of wealth to cover future costs for schooling and new housing for their children. It is important to keep this investment class for ordinary Australian families.
“The most important contribution to help families with housing is to increase supply. In Sydney the Department of Planning says 33,200 new homes are needed each year but last financial year supply only reached 27,348 new homes. Clearly many more new homes are needed to match government targets. The last 5 years in Sydney has seen new housing supply well below targets so in boom times we should be producing close to 40,000 a year.”
