The chief executive of a national accounting group has offered his insights into the potential impacts of negative gearing changes.
BDO Real Estate and Construction Partner, Eddie Chung, says talk about the potential to wind back negative gearing benefits on a retrospective basis is “concerning”.
“People make medium to long-term economic decisions based on the law at the time, and while some may argue the environment has changed to warrant the wind back of negative gearing benefits, doing so retrospectively and applying it to people who have already bought properties on which negative gearing benefits are claimed would be tantamount to penalising them for planning ahead and being financially responsible,” Mr Chung said.
“These people should not be penalised for choosing an option that would make themselves financially self-sufficient, rather than having to rely on the government for assistance when they retire.
“Shifting the goal posts by way of retrospective application is blatantly inequitable.”
Mr Chung said taking a retrospective stance on negative gearing could impact negatively on “market confidence and therefore the stability of the economy”.
“It is akin to telling people who have been saving for years through their superannuation funds ‘the environment has now changed and the government will seize all superannuation benefits to balance the budget’,” he added.
“You simply don’t tinker with people’s medium to long-term plans because these plans need political and economic certainty to achieve their intended outcome, which underwrites the economic future of this country.
“Even if negative gearing changes are to be entertained, allowing these changes to apply retrospectively must not be an option.”
[Related: REINSW dismisses negative gearing changes]