Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
subscribe to our newsletter

Welfare group attacks negative gearing 'myths'

A lobby group has attacked several “myths” surrounding negative gearing, including the widespread belief that scrapping the scheme in the 1980s led to higher rents.

The Australian Council of Social Service (ACOSS) said it was wrong to claim that the Hawke government's restrictions on negative gearing in the 1980s resulted in rent increases.

“The main reasons for rent increases at that time were higher interest rates and a share market boom which diverted investment from rental property,” the council said in a recent report.

Advertisement
Advertisement

“Even so, this only happened in Sydney and Perth. Lending to rental property investors still rose by 42 per cent across Australia.”

ACOSS said negative gearing and capital gains tax together cost the Budget $7 billion a year and fuel housing price booms.

Chief executive Cassandra Goldie said negative gearing is “shrouded in myth” that need to be dispelled so a “sensible discussion” can begin.

"Negative gearing and the tax break for capital gains don't improve housing affordability; they make it worse by fuelling home price booms like the one in Sydney right now.

“Less than one-tenth of negatively geared housing investments are for new properties, the other nine-tenths bid up the price of existing housing,” she said.

Ms Goldie said it is also false to claim that negative gearing mainly benefits ‘mum and dad' investors on middle incomes.

"The reality is that over half of geared housing investors are in the top 10 per cent of personal taxpayers and 30 per cent earn more than $500,000.

"This is a longstanding problem and it's time it was fixed,” she added.

Welfare group attacks negative gearing 'myths'
mortgagebusiness

Latest News

The corporate regulator has confirmed that responsible lending obligations are not a barrier to making variations from P&I to IO terms i...

The non-major has continued to recover lost ground in the home lending space. However, a rise in interest income has not been enough to prev...

Expectations of a “significant economic shock” in the first half of 2020 have prompted both Fitch Ratings and S&P to downgrade Austr...

FROM THE WEB
podcast

LATEST PODCAST: Managing the influx of COVID-19-related loans

Do you expect COVID-19 to reduce or increase your business flows?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.