26 April 2016
The decision by the Federal Government to make no changes to negative gearing or the assessment of Capital Gains Tax is positive for the housing market, says the Urban Taskforce.
“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.”
“The Federal Government decision to confirm the current arrangements for negative gearing will give continuing confidence to investors in the housing market and the Urban Taskforce believes this is very positive news.”
