The facts on negative gearing
Yesterday the ABS released new statistics on government taxation.
It found that last financial year, Australians paid over $45 billion in property taxes – up over 10 per cent in a year. This was during a year when overall taxation increases by 2.3 per cent. So the burden on property is growing.
On the same day, the Grattan Institute released ‘a plan’ for retrospective changes to negative gearing and higher capital gains tax. Its plan would raise tens of billions – but according to them would result in “no change in investor behaviour”!
With more voices arguing for big increases in property taxes, it makes our job defending the industry more vital than ever.
Fortunately, the Government has ruled out changes to negative gearing in the Budget.
There will be plenty of debate about negative gearing in the coming election campaign. Here are the facts:
- Over 2 million Australians own an investment property – including 1.2 million who negative gear. It’s a vital tool for wealth creation.
- 770,000 Australians who negative gear have a taxable income below $80,000.
- 58% of negative gearing deductions (by value) go to the people with taxable incomes less than $80,000.
- New investors account for 30% of all new construction – they are vital to increasing supply and keeping pressure off house prices
- The cost to the Budget of negative gearing is falling – down 53 per cent over the past two years.
Next week, Property Australia will arrive in your inbox on Thursday morning – this will allow time for a thorough analysis of the Federal Budget which is to be handed down next Tuesday night.