subscribe to our newsletter
Association warns against changes to housing tax

Association warns against changes to housing tax

The Labor Party’s plan to halve the capital gains tax (CGT) discount on investment properties will not fix the nation’s housing affordability and supply problems, an industry body has warned.

Graham Wolfe, chief executive of industry policy and media at the Housing Industry Association, said reducing the CGT will push investment away from Australia’s housing sector.

“The priority for tax reform of housing must be to reduce the tax burden on new home buyers,” he said.

“Research conducted by Independent Economics on behalf of the HIA, using a model also applied by the Commonwealth Treasury, confirmed that restricting access to negative gearing for residential property would reduce investment in housing, erode housing affordability and put upward pressure on rents.

“The level of taxation on a new house and land package can be up to 44 per cent of the final price, which far outweighs the positive benefits to investment in new housing to support the rental market, of the current CGT or negative gearing regimes."

Mr Wolfe said now is a pivotal time for investment in new housing, with new home starts expected to decline over the year ahead.

“Any changes to taxation with respect to housing must be aimed at boosting housing supply and reducing the overall tax burden on the sector,” he concluded.

[Related: Negative gearing changes 'disastrous' for Queensland]

 

Association warns against changes to housing tax
mortgagebusiness logo

Latest News

The major bank has been scrutinised by the financial services royal commission over its response to a technical error that more than doubled...

APRA’s latest effort to control the mortgage market will force the average Sydneysider to fork out a $369,542 deposit for a median-priced ...

Reserve Bank of Australia governor Philip Lowe has warned that China’s “highly indebted economy” poses a threat to prosperity in Austr...

Promoted Stories

podcast

LATEST PODCAST: Macquarie merger, WA property tax and AMP staff haemorrhage

Do you expect access to credit to get harder this year?