Reform negative gearing housing policy in Sydney and Melbourne
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Negative gearing is an outdated federal government policy originally used to stimulate investment in housing. Sydney and Melbourne in no way need stimulation. This current policy coupled with population increases are driving up house prices.
It was a policy designed to prevent baby boomers needing the pension, but why should taxpayers (some who will certainly never own their own home) pay to safeguard others from making losses when purchasing multiple properties?
What is negative gearing? Negative gearing is a tax deduction where you claim your expenses and losses, this includes your mortgage and even your renovations. The rest of society will subsidize the costs at your tax rate. That means a saving of nearly half your costs if you’re in the highest income bracket and a much lower risk of losses.
Therefore if you had money to invest, you would be silly to not invest in housing.
It’s time for sensible policy change to get rid of an unfair and outdated subsidy that distorts the market and drives up house prices and rents.
In Sydney and Melbourne we want:
- a gradual abolishment of negative gearing in residential housing by 2020
- the capital gains discount reduced to a flat 25% (instead of the current 50%) on residential property by 2020
- a ban from institutions and managed funds from investing in residential property worth under $3 million from 2018
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