The Property Council of Australia has hosted a property industry roundtable in Canberra, designed to discuss the potential impacts of changes to negative gearing and capital gains tax (CGT) proposed by the federal Labor opposition.
As part of its housing affordability policy, the Australian Labor Party (ALP) has proposed that if elected, it would limit negative gearing to new housing and reduce the CGT discount from 50 per cent to 25 per cent.
The property industry has voiced strong opposition to Labor’s proposal, claiming that it would further soften investor demand and exacerbate weakness in the housing market.
Property Council of Australia CEO Ken Morrison said the property roundtable, which was convened by the Assistant Minister for Treasury and Finance, Senator Zed Seselja, and also attended by Prime Minister Scott Morrison and Treasurer Josh Frydenberg, provided policymakers with an opportunity to hear the industry’s concerns.
Mr Ken Morrison said that Labor’s housing plan would limit the supply of rental housing.
“It’s not the time to be making changes to negative gearing or capital gains tax that undermine investor confidence in new or established housing, which helps meet the housing needs of one-third of Australian households who rent,” Mr Morrison said.
“Nine out of 10 property investors own just one or two investment properties, with the overwhelming majority owning a single investment property.
“Supported by the current taxation arrangements, they play a vital role in meeting demand for rental housing.”
He concluded: “The current arrangements for negative gearing and capital gains tax must be left in place to ensure these Australians continue to be encouraged to invest in property to support their own retirement as well as meet the housing needs of other Australians.”