Dutton Opposes Changes to Negative Gearing
The Albanese government is facing a dilemma regarding negative gearing as the Greens advocate for reform, while the Coalition supports the current system.
The debate over negative gearing and capital gains tax reforms has resurfaced with the government’s decision to review these policies. While it is unclear whether these measures will be scrapped, the Labor government has confirmed they are reviewing the tax arrangements as part of their regular policy assessments.
Opposition Leader Peter Dutton has firmly stated that the Coalition will not make any changes to negative gearing if they win the upcoming election, citing concerns about disrupting the housing market and leading to higher rents.
Speculation suggests that the government is under pressure to abolish the policy, as the Greens argue that it favors investors over first-time buyers and contributes to rising property prices.
Greens MP Max Chandler-Mather has been advocating for the phasing out of negative gearing and urged the government to cooperate in addressing the housing crisis.
According to Treasurer’s website, negative gearing is a common investment strategy in Australian real estate, allowing investors to claim loss as a tax deduction when property costs exceed income generated.
Labor Remains Non-Committal
Prime Minister Anthony Albanese and Treasurer Jim Chalmers have not committed to scrapping or changing the policy, emphasizing their focus on increasing housing supply.
Both leaders have highlighted the need for more housing construction and have been working to pass key bills like Help to Buy and Build to Rent.
Academic Perspective:
Ben Philip, an Associate Professor, believes that removing negative gearing may not significantly impact housing affordability, as it is a legitimate tax deduction similar to other investments where losses are incurred.
Additionally, a report by Housing Investment Australia points out that negative gearing is not unique to Australia, as other countries like Germany, Japan, Canada, and Norway have similar systems with limitations and restrictions on loss offsets against future income.
