“Independent research has found that changing residential negative gearing would reduce housing affordability, and under the current housing policy settings, would lower Australian living standards,” said the HIA's executive director, industry policy and media, Graham Wolfe.
“New housing is one of the most highly taxed sectors in the economy, and the removal of negative gearing would only make that situation worse and discourage investment.”
Wolfe said that a wide range of demographics would be affected by any changes.
“It is important to remember that negative gearing is not the domain of so-called ‘wealthy investors’.
“Official taxation statistics for 2011/12 show that over 79% of those with a rental investment property have a total income less than $100,000 and around three quarters earn less than $80,000.”
Wolfe said it was most important to abolish stamp duty on residential property conveyances, resulting in more affordable housing for renters and owner-occupiers.
He said negative gearing promotes private investment in the rental market, which stimulates economic activity and takes the pressure off social housing and the public purse.
“With an ageing workforce and future pressure on services, policy settings such as negative gearing that promote wealth creation and self-sufficiency in retirement should be promoted,” said Wolfe.
“Private investment in residential property should not be seen as a cash cow to fund the supply of affordable housing."
