Tuesday, 26 April 2016

Turnbull digs in over anti negative gearing Grattan report - costs $11billion yr in gov revenue

*Update: Turnbull out on a limb over negative gearing - Canberra Times
Australia's negative gearing, on current figures means Australia has about 8% of it's residential property sitting vacant, whilst rich landowners use the system to minimize tax. The Turnbull gov has said that the May budget won't touch it.

Now it's in the news that the lost revenue to the gov from negative gearing is $11billion a year. To have property's sitting idle whilst real estate agents increase rents and property prices claiming a shortage of rental and properties to buy. A system that distorts the market, for one of the most fundamental rights of people; to be housed.

BTW our rent is going up $20 a week in June. We'll then be paying $400 a week between us. We're currently both on pensions with David as the carer of me (we couldn't survive with David on Newstart and we had no choice but for him to apply for the Carers Payment, which he qualified for). Yet all we get off the gov is how exciting it is to be a property investor in Australia FFS.
The well-respected Grattan Institute released a report on Monday, Hot property: negative gearing and capital gains tax reform, arguing that the government’s dire warnings that rents will soar and property prices will crash if negative gearing and the capital gains tax discount are wound back are not supported by the facts. 

It has raised the temperature of the already heated debate over housing investment policy, coming just one day after Turnbull promised not touch negative gearing in his May 3 budget.

The treasurer, Scott Morrison, also hit out against the report, which claims the government’s dire warnings about changes to negative gearing are wrong. 

Turnbull says current policy settings are helping “mum and dad investors” and that Labor’s policy – to restrict negative gearing to new housing and to cut the capital gains tax discount from 50% to 25% – would send rents soaring and property prices crashing. 

The Grattan Institute report shows negative gearing largely benefits the wealthy, with the top 10% of income earners before rental deductions getting almost 50% of the tax benefits. 

It also shows the current regime allows investors to reduce and defer their personal income tax, at an annual cost of $11bn to taxpayers. The Guardian  
 So who would you trust on this? The Grattan Institute which has researched it all, or Turnbull saying that Labor is wrong over it?

The Grattan report "Hot property: negative gearing and capital gains tax reform" is here (PDF).

Rich electorates benefit most from negative gearing tax minimisation