The Housing Industry Association has reacted to the news that Labor has dropped its plans to end negative gearing.
Labor scrapped the policy in a party meeting, bringing an end to a policy pledge from the last election that had caused consternation in the construction industry.
Negative gearing is when an investor borrows against an asset – typically property – in such a manner that it costs the owner more than it makes.
It is used as a tax saving measure, as the 50% capital gains tax deduction that comes with a negatively-geared asset can make it turn a profit, and as a way of generating investment in housing.
Lanor had previously planned to halve the tax deduction in an attempt to raise revenue, saying that it had not had the intended effect on new housing stock and only benefitted rich investors.
Now, they have decided that the public backlash on the negative gearing change is too much compared to the political capital that had to be expended to make it happen.
“Today’s announcement by the Australian Labor Party to drop plans to increase taxes on housing through changes to negative gearing and capital gains tax will provide certainty for the housing industry and for Australians that are looking to invest or rent,” said HIA Managing Director, Graham Wolfe.
“Private rental housing plays a critical role in Australia’s housing supply continuum. Without a reliable pool of residential investors across Australia, hundreds and thousands of households would find it harder to put a roof over their heads.”
“Australian’s need to have the ability to access affordable housing, whether as a renter or as an owner occupier.”
“HIA looks forward to working with all political parties in the lead up to the next federal election to develop national policies that will promote housing supply, support home ownership and ensure those most in need of housing assistance are supported by government.”
