Powered by MOMENTUM MEDIA
subscribe to our newsletter
Welfare group attacks negative gearing 'myths'

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.

“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 proportion of income required to service a home loan decreased nationwide over the September quarter 2018, according to joint research f...

Delinquencies underlying Australia’s mortgage portfolio increased over the year to September 2018 off the back of out-of-cycle interest ra...

The financial services giant has announced the launch of a new website designed to serve as a “one-stop shop” for financial education. ...

FROM THE WEB
podcast

LATEST PODCAST: What the conclusion of the royal commission means for the mortgage sector

Is enough being done to ensure responsible lending?