The Property Council of Australia says it welcomes the findings of a new report that negative gearing is neither “evil”, “a loophole in the tax system” nor the “key culprit” impacting house prices.
Property Council CEO Ken Morrison said these findings from the Deloitte Access Economics report Mythbusting tax reform adds to an expanding base of evidence that debunks the myths around negative gearing.
“As the report shows, pointing to negative gearing as the primary driver for higher house prices is wrong,” he said.
“We have seen a distinct shift in the hot property markets of Melbourne and Sydney in recent weeks. This wasn’t due to any changes in tax policy, it is a result of new housing supply coming onto the market and finally taking the pressure off prices.
“And that’s why it’s so important to sustain a strong level of new housing construction if we are to tackle housing affordability long term.”
Mr Morrison also welcomed the federal government’s focus on a facts-based tax debate, focused on outcomes over process.
“The Turnbull government has made clear that everything is back on the table for the tax debate,” he said.
“It is encouraging to see that this includes putting the facts forward as part of the policy work.”
Mr Morrison said Assistant Treasurer Kelly O’Dwyer was right to point out in October that average income earners largely are the people who get to take advantage of negative gearing.
“Negative gearing is not a tax lurk for the wealthy – it’s a legitimate and long-standing part of the tax system used predominantly by everyday Australians looking to get ahead,” he said.
“Analysis of the latest ATO data shows those who use it most earn around or under $80,000 a year.
“In fact, 840,000 of these people comprising clerical staff, teachers, tradies, nurses, cleaners and emergency services personnel declared a net rental loss in 2012-13.
“These are the ones who must remain front and centre in any debate around negative gearing,” he said.