Abolish stamp duty, not negative gearing: HIA

The Australian Council of Social Service recently said 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.

However, HIA executive director Graham Wolfe argued that negative gearing is not the domain of wealthy investors.

“Official taxation statistics for 2011 and 2012 show that over 79 per cent of those with a rental investment property have a total income less than $100,000,” he said.

“Around three-quarters earn less than $80,000.”

Mr Wolfe said research has found that removing negative gearing would reduce housing affordability and lower Australian living standards.

“New housing is one of the most highly taxed sectors in the economy and the removal of negative gearing would only make that situation worse and discourage investment,” he said.

“This would in turn reduce housing supply and increase the cost of renting.”

Mr Wolfe said the top priority for housing tax reform should be scrapping stamp duty on residential property transactions.

He said it would make housing more affordable for both renters and owner-occupiers.

“Discounting residential negative gearing in isolation is a retrograde step for tax reform, in terms of both efficiency and equity,” he said.

“Negative gearing promotes private investment in the rental market, thus stimulating economic activity and taking the pressure off social housing and the public purse.”