Negative gearing getting headlines for all the wrong reasons
Last week, the NSW Planning Minister Rob Stokes reopened the debate on negative gearing, disagreeing spectacularly with his Federal Liberal colleagues.
Minister Stokes used a speech to the CEDA lunch last Friday to call for reforms to negative gearing, arguing that it was a distortionary tax policy that was locking a generation out of the housing market.
Rather than being bold and calling on his immediate colleagues Premier Mike Baird and Treasurer Gladys Berejiklian to reform stamp duties, or even to commit to serious reforms in his own portfolio of planning, Minister Stokes took another tilt at the strawman that is negative gearing.
In the debate about how to solve the housing affordability crisis, the negative gearing argument is an easy and lazy one to reach for.
Even the research by the McKell Institute and the Grattan Institute – both vigorous supporters of reforms to negative gearing – has found that the impact on house prices would be 0.49 percent or 2 percent respectively.
Cutting stamp duties – that add anywhere between 4 and 5 percent depending on price – would have a far greater impact on the affordability of housing for many Australians.
As would reforms to infrastructure charging regimes that add another 4 or more percent to house prices. These charges are often hidden, but are ever escalating.
The Property Council was pleased that Prime Minister Turnbull and his Ministers were quick to confirm the Federal Government is not considering any reforms to negative gearing.
We will continue to make the case that negative gearing is not a housing affordability solution. It is at best, a short sighted tax reform proposal.
Link: ‘Stokes on Negative Gearing? Not so fast, says Property Council‘