Negative Gearing set to stay
Despite much talk, the Federal Government announced over the weekend they won’t be making any changes to negative gearing in the upcoming budget.
The news of course, was met with familiar cries that the tax concession distorts property prices and encourages speculative investing. According to our sources at BlueWealth Property, some of the most vocal criticism came from the Grattan Institute who released a paper titled ‘Hot property: negative gearing and capital gains tax.’
In a break from tradition, the Prime Minister responded to criticism of the announcement in writing, saying that ‘the [Grattan Institute’s] paper is littered with factually incorrect statements, claims that are unsupported by evidence and direct contradictions. And its economic analysis in many places leaves a lot to be desired.’
Mr Turnbull further builds the case for negative gearing by noting the effect of its removal on the rental market and income equality..
It seems most likely that the Liberal, (or Labor government as the case may be) will maintain negative gearing in its current form.
Read the Prime Ministers full response here
For more on the impact of Labour’s policy, click here.