Housing campaign calls for govt to dump investor handouts in budget
Everybody’s Home Media Release
As pressure mounts on the federal government to wind back property investor tax breaks, a national housing campaign is calling for the handouts to be scrapped entirely.
In its pre-budget submission, Everybody’s Home has urged the government to abolish negative gearing and the capital gains tax discount to make housing in Australia fairer and more affordable.
It follows revelations that Australian Senators and MPs own an average of two properties each.
Everybody’s Home spokesperson Maiy Azize said the forgone revenue could build half a million social homes within the next decade.
“Housing in Australia has been rigged against average Australians because the government has chosen to prop up the private market,” Ms Azize said.
“Handouts like negative gearing and the CGT discount are pushing up the cost of buying and renting, and they’re making Australia more unfair and more unequal.
“Politicians understand that trade-off. Most have declared at least one investment property. Some have as many as seven. Each property brings in tens of thousands of dollars in tax benefits funded by the taxpayer every year.
“Our federal budget submission shows we’re losing billions to these handouts every year. We’ve also found that scrapping them would fund enough social housing for one in three renters over the coming decades.
“More and more people want the government to dump these tax breaks and build a system that works for everyone.
“Without action, housing in Australia will only become more unfair and more expensive.”
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11 comments
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Clakka
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ill fares the land
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andyfiftysix
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Robert Mutton
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Terence Mills
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Clakka
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Fred
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andyfiftysix
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Fred
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Steve Davis
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andyfiftysix
Return to home pageYeah, on principle it would be appropriate to significantly and with equity in mind amend negative gearing and capital gains discounts, but to ‘abolish’ is a thoughtless demand, as variants of both measures can be useful in obtaining better equity and opportunity for low / middle income earners in certain circumstances.
As for ‘abolishing’ them in the May budget, it would be political suicide. The ‘Teals’ will be releasing their research and policies soon after mid-year, and that will provide good grist for the Govt. It should approach any amendments / changes iteratively, and should be brought in with grandfathering, or other economic calamities could ensue.
As for the blackmailing screeching of Bandt and Chandler-Mather, it is typical low-brow opportunistic politicking, not much better than the Duttonate, and yet playing into the Duttonate’s agenda. The Green’s screech is just that, and not accompanied by any sober implementation analysis.
I totally agree with changes to negative gearing and the CGT discount – a 50% discount for holding an asset for only 12 months only fuels asset speculation, especially property. But I also think it is time to totally revamp the “main residence exemption” (MRE). I get the impression there are a lot of people who buy, renovate and flip, all the while claiming the main residence exemption despite that in truth, they are carrying out a series of “profit making ventures and under the tax law, strictly applied, the profits should be taxed as income. There is also no principle of economics suggesting that if someone buys a top-end property for $10.0 million and later sells that property for $20.0 million they should be allowed to retain all of that gain. If that seems exaggerated, I recently saw an ad for a Queensland property where the asking price was $35.0 million. Some quick research suggests the current vendor paid about $8.0 million for the property back in 2008, so will pocket around $27.0 million tax-free – assuming the property sells at the asking price. Somewhere along the line, more than one person has, in all likely, made some very big but untaxed capital gains. My suggestions are along the lines of a minimum ownership period before being able to claim the MRE – perhaps 5-years. The MRE should also be changed so that where a homeowner makes a gain in excess of $1.0 million, the MRE is scaled down, so someone who makes a $10.0 million profit gets, say, one-half of the MRE, but not a full MRE.
I would say it doesnt go far enough. Housing as speculation needs to be lanced at every opportunity. It should be near impossible to make money flipping property.
We have been bombarded constantly that the sky will fall if we take away incentives. Well, the sky HAS fallen with the incentives now in place.
Its not only a social issue, its an economic issue too. We take billions out of the productive economy every year to fill bank coffers.
How is this not distorting capital markets? Instead of investing in the new and innovative, we park our wealth into property. Property doesnt employ people or make anything, it just sits there. It makes us slaves for 30yrs……..some fucking quality of life that is.
it just feeds into what do we want our economy to look like in 30yrs. innovative ,exciting and lucrative…….yea ok, its a dream that i wont see in my life time. Hell we are so far up someone’s arse, all we see it shit.
Andyfiftysix – I couldn’t have said it better myself, you completely summed the situation up. Housing should NEVER have become an investment product. We are now suffering the consequences of ridiculous decisions, with the majority of the existing ‘decision makers’ with their snouts firmly in the trough!
I’m always a bit wary of these lobby groups who propose legislative change and organise petitions but don’t actually do the homework.
We know that the coalition will argue that Negative gearing and associated CGT concessions encourages investors to buy properties (both new builds and existing houses) operate at a loss and that this adds to the available stock of houses available for rental – to the coalition it’s all win win.
The Labor party have argued that allowing these concessions on existing housing stock is pushing up house prices as investors churn and outbid each other over existing houses and that they are are not building new rentals properties. Thus the system, the ALP argue, should only allow Negative Gearing on new builds, actually increasing the available stock of rental housing.
Everybody’s Home and the Greens need to do the economic analysis to prove that the coalition approach is wrong and is distorting the market and that the Labor policy (or some other policy) would actually increase the availability of rental properties on the market.
Could I suggest that EH present the economic rationale, one that we can all get behind otherwise we are not advancing the argument.
PS: I couldn’t open the link to the EH Pre-Budget Submission but I have scanned their website.
Yeah it’s attached to notions of the genetic imperative, originally practiced by the parasitic and thieving elites, now it’s become the m.o. of all the parasitic aspirants, and brainless competitive arseholes.
It will be very difficult to turn that pirate ship around.
How about doing the same as Singapore by simply making it illegal for foreigners/non-residents, whether individuals or businesses, to own real estate of any sort in Australia, with a 10 year grandfather period to transition ownership. That would put a stop foreign states distorting our market by covertly sponsoring “individuals” to buy in Oz and reduce the number of empty properties. It would also prevent foreign states from affecting primary industry. It would take guts to do…
Fred, your off with the pixies if you think foreign ownership is the root cause of our problems.
We already have a registry and it costs $50 to fill out a form to say its a foreigner buying the house.
And just think of the logic of your “theory”. We have a housing shortage at the bottom end , not the top end. If somebody has enough money to buy a house in Australia from overseas, they clearly have a lot of money and are not going to buy at the bottom end.
Its clearly a look over there argument stirring up an us vs them shit fight. It may make you feel superior cause you have found the “real cause”. clearly you had a thought bubble.
The issue with housing is that its looked upon as an investment rather than a roof over your head. All incentives are with the investor. Ask people why they have multiple properties and the answer is….” i am providing for my retirement..”. The system is fucked and people are encouraged to act like fuckwits.
Andy56: Are you saying foreign ownership has no effect on the price of our market? If so, welcome to”pixie land” or wherever I’m supposed to be. I didn’t say it was the “root or real cause”, just a contributing factor like negative gearing, CGT exemptions, no limits on the number of investment properties, no requirements on developers to build a percentage of low cost housing, lack of a mature modular housing industry, etc. each of which are not the root cause. “We have a housing shortage at the bottom end” Well blow me down, who would have thought that poor people would struggle to pay for accommodation not at the bottom end. You are being presumptuous/off with the pixies if you think there is no foreign ownership at the bottom end – have you seen how much the bottom end costs along with the ridiculous price versus annual income ratio.
Another factor is the lack of a “renters bill of rights”, which should be common across all of the states. Oh and another, Ozzy banks don’t offer whole of term fixed interest rates any more.
I could brush the shortage off as being caused by government…
Fred, yes, a “renters bill of rights” with real teeth and punitive provisions for non-compliance would very quickly cool down the market.
And if Singapore is more interventionist than us in protecting the vulnerable from market distortions then they are on the right track.
Oh i see, Fred, Singapore has low cost housing……….you been there lately?
I dont know why you think picking on a “contributor” that borders on rascism and patriotic crap is so important.
I also happen to know what it feels like to be treated as a foreigner who wants to buy a property. I am not allowed here in thailand to own my own house. I am not here to speculate and there is no shortage of housing or land where i am. Thats PURE rascism with no nuance of what i bring to the table. The thai have no qualms about exploiting us when they need money. You seriously think this is what we should do?
FOREIGNERS BUYING OUR PROPERTY IS A SYMPTOM, not the cause of high prices.
If the market is hot or better than elsewhere, capital like water will find its level. Why are they getting out of their own markets to invest here? Because it MAKES MORE money.
Negative gearing and capital profit discounts ARE actual market incentives. Retirement fund investment assistance IS a market incentive.
It gets back to my point, if you make “investing” in property such that its impossible to make money, NOBODY, not even foreigners will invest in our property market. The OPERATIVE word is INVEST. I have absolutely no problem with foreigners coming here to buy a house to live in. Blanket BS bubble thoughts are not solutions.