June 20th,2016

Changes to the current taxation arrangements for residential property as proposed by Labor would shrink investment in housing, see increases in rents larger than they would otherwise be and require greater government investment in social housing according to the real estate industry.

“Negative gearing contributes to the provision of new housing with around a third of all new dwellings construction being financed by investors every year and the amount of investor loans committed to new housing increasing by more than seven-fold since 1986”, said Real Estate Institute of Australia President, Mr Neville Sanders.

“An increase in rental supply means higher rental vacancies and lower rents than would otherwise be the case. The benefit to renters from improved rental affordability was directly recognised by the Henry Tax Review (2010), commissioned by the current Opposition, which noted that ‘the current tax advantages available to highly geared investment can operate as a subsidy to renters by placing downward pressure on rents”, added Mr Sanders.

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