The federal government is considering limiting the number of properties investors can buy, as it struggles with viable means of containing property prices in the southeastern capitals.
According to an article that was published in The Australian Financial Review, the government is looking at ways it can cap the value of tax breaks for property investment as a means of tackling the housing affordability crisis, which varies widely across the country.
The number of Aussies with at least five rental properties has increased by more than 6%, according to new figures from the Australian Taxation Office (ATO). Individuals with interests in five or more rental properties jumped 6.3% to 37,213 in 2014-2015.
The Turnbull government has ruled out abandoning negative gearing and has indicated it will consider more “surgical” measures of dealing with housing affordability instead. The government also appears to have moved away from an earlier proposal which would have allowed first-home buyers to access their superannuation funds to afford a deposit.
Malcolm Gunning, president of the Real Estate Institute of Australia (REIA), said the percentage of investors that own three or more investment properties is very small. Hence, capping the number of properties those investors can own is merely “clipping around the edges”.
Gunning further warned that the cap could decrease the supply of new properties coming onto the market, which in turn would cause rents to rise.
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