Property investment industry veteran Brian Chant, Managing Director of Property Asset Planning, today supported calls from economists, community groups and the building industry for Treasurer Joe Hockey to seriously consider reforming Australia’s negative gearing rules in next months Budget.
Mr Chant said, “It is time for negative gearing to be focused on achieving what it was introduced to do in 1936. That is, stimulate the housing and construction sector in the economy whilst providing quality, affordable rental accommodation.”
In the May Budget the Federal Government is believed to be taking a good look at negative gearing rules to help balance the books and also make housing more affordable and accessible.
Government sources have said that one of the changes being considered by Treasury is limiting future access to negative gearing so only new properties will be eligible. It is understood Treasury and the Parliamentary Budget Office have done work in this policy in recent months.
According to the Grattan Institute in their recent paper Renovating Housing Policy such a move could save the budget around $4 billion per year. Given the severe constraints on the federal budget it may be a battle the government considers worth having.
The Grattan Institute report also showed that negative gearing was not producing much needed new affordable housing.
Data from The Reserve Bank of Australia data found that the overwhelming majority of investors (almost 95%) buy established homes not brand new homes in areas where accessible accommodation is needed.
“In the last 25 years negative gearing has done little to boost supply of rental accommodation or improve affordability”, said Chant. “Not only would proposed changes to negative gearing improve the budget’s bottom line, stimulate the building industry and address the shortage of rental accommodation where it’s needed it provides a great vehicle for people wanting to become self sufficient in their retirement through investing in brand new South Australian property.”
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ABOUT BRIAN CHANT
Brian Chant started Property Asset Planning having been involved in the building and real estate industries for a number of years where he also invested in many properties himself as a means to build a solid financial future and reduce his taxable income. Property Asset Planning has become the vehicle to assist hundreds of others to do the same.
Rick Carter, eNova DIGITAL