Negative Gearing is now officially off the table

Expert Advice with Philippe Brach 26/04/2016 

Negative Gearing is now officially off the table. Malcolm Turnbull announced it a short time ago. This was known for a couple of months but it had not been announced officially. Now it is done. Every now and then, the topic of changes in negative gearing rears its head, but since 1985 no one has dared touch this often maligned tax incentive.

When the Hawke labour government did segregate negative gearing losses back in 1985, the Australian economy was so badly affected that it took only 18 months for the VERY SAME government to re-instate it. Imagine one of our current governing party changing a law and then reverse it shortly afterwards…It is the worst way to acknowledge a major stuff up!

I really believe that people’s confidence in our government and their handling of the tax system is paramount to our investment behaviour and it dictates the mood of consumers and investors. If rules change constantly, it creates a feeling of distrust and investors react accordingly. From this point of view, changing rules to Superannuation for instance, however small, is a bad idea. It will create doubt in peoples' minds and push them into alternative types of investments. With a reliable track record of over 30 years of taxation consistency, negative gearing in general and property investment in particular are the most obvious choice for people trying to plan a comfortable retirement.  So what are you waiting for!!

Philippe Brach   Philippe Brach is CEO of Multifocus Properties and Finance

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property

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