Negative gearing benefits everyday Australians

Negative gearing benefits everyday AustraliansA recent report commissioned by the Property Council of Australia and Real Estate Institute of Australia found that a third of all new home dwelling construction is financed by investors. The report found that negative gearing and the capital gains tax discount are helping to boost the supply of new homes, placing downward pressure on prices and helping ordinary Australians get into the property market.It is a myth to think that negative gearing is a tax that merely benefits the wealthy. Australian Taxation Office Statistics show that of the almost 1.26 million Australians who declared a net rental loss in 2011/12, 883,325 people – or 79 per cent – earn around $80,000 per annum or less.Those that incurred net rental losses consisted mainly of average workers including 62,000 clerical staff, 54,000 teachers, 47,000 salespeople, 36,000 nurses and tens of thousands of hospitality workers.The majority of Australians who negatively gear a property – almost 73 per cent – only own one investment property. A further 18 per cent only own two investment properties.The Property Council has had a strong media presence on the topic of negative gearing. To see NSW Executive Director Glenn Byres’ interview on Sky News click here. To download the report on Australian housing investment: analysis of negative gearing and CGT discount for residential property, see attachment below.