A tax increase on investment properties would negatively impact Australian families, economic growth and jobs, according to a local federal candidate.
There are 9130 hard-working Australians in La Trobe using negative gearing, Liberal Member for La Trobe Jason Wood said.
“It is about time Bill Shorten and Labor explained to each of these 9130 individuals in La Trobe why they think building some modest wealth for their families is so egregious. This is just a tax increase to fund Labor’s spending addiction,” Mr Wood said.
“In La Trobe, those who are negatively gearing have an average net rental loss of $8292. If they weren’t able to negatively gear, those on the middle income tax bracket of 32.5c would face an annual tax increase of $2695.”
Mr Wood said most of these middle income earners were investing in established housing.
“Labor wants to impose bans on negative gearing, so that middle income investors will have to compete with larger numbers of wealthy investors for a much smaller pool of new housing stock, crowding them out of the opportunity they have right now,” he said.
“Their proposal will take up to one third of buyers out of the housing market, which will reduce the value of homes. Driving down the value of the most important asset for most Australians is not a strategy for economic growth and enhanced prosperity for the Australian community.”
Labor candidate for La Trobe Simon Curtis said his party was committed to making policy in the national interest not for “vested interests”.
“The Liberal Party believes that taxpayers should provide more support to property investors seeking their seventh property than to young Australians seeking to own their first home,” Mr Curtis said.
“Jason Wood is happy to sit by while the Australian dream of owning your own home slips away from generations of young Australians.
“The Liberal Party is pushing a scare campaign against improving housing affordability.”
The Australian Bureau of Statistics released new figures on government taxation this week, indicating that Australians paid over $45 billion in property taxes; up more than 10 cent in a year.
A Property Council of Australia spokesperson said that this was during a year when overall taxation increased by 2.3 per cent.
“Over two million Australians own an investment property – including 1.2 million who negative gear. It’s a vital tool for wealth creation,” the spokesperson said.
“770,000 Australians who negative gear have a taxable income below $80,000 and 58 per cent of negative gearing deductions go to people with taxable incomes less than $80,000.”
The spokesperson said the cost to the budget of negative gearing has dropped 53 per cent over the past two years.
Originally published at Pakenham Gazette.