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Investor tax to take a hit

INVESTMENT property owners in the North and North-West receive the lowest benefit in the country from landlord tax benefits, according to an Australia Institute report.
Nanjing Night Net

Lyons, Bass and Braddon are among the 10 electorates which have the lowest amounts deducted for negative gearing, with Lyons’ net rental loss of $5528 the lowest in the nation.

Braddon’s net rental loss is listed as the third lowest in Australia and Bass’ as the eighth.

A debate over the tax measure has waged since Labor announced a plan to allow only owners of new properties to negatively gear.

Under the Labor plan, negative gearing would be grandfathered so people who buy an investment property before July 1, 2017, would not be affected.

Franklin Labor MHR Julie Collins said the report showed the tax measure was skewed towards the wealthy, rather than benefiting mum and dad investors.

Ms Collins, whose electorate is listed as receiving the 19th least benefit from the measure, said the ALP’s policy would ensure tax subsidies were fairly distributed throughout the country.

The policy has been attacked by the Property Council of Tasmania, which says abolishing negative gearing could skew the rental market and hurt ordinary Tasmanians.

Property Council of Tasmania executive director Brian Wightman said 18,400 Tasmanians claimed negative gearing, and tinkering with it would hurt ‘‘ordinary Australians looking to change their lives’’.

‘‘If you look at the postcodes where the most people who negatively gear reside … they’re from middle-class suburbs, not the mega rich,’’ he said.

More than 2000 negative gearers live in Launceston, while the Southern suburb of Bellerive (965 negatively geared properties) and Devonport (936) round out the top three.

The list, ranked by postcode, also ranks Burnie, Ulverstone and Kings Meadows in the top 10 suburbs.

‘‘Negative gearing is used by aspirational, working-class people to secure their family future,’’ Mr Wightman said.

Mr Wightman said it was ‘‘a big leap of faith’’ to assume existing and new property owners would migrate over to negatively gear new homes, especially with Labor’s proposed reduction to the capital gains tax.

The federal Liberal Party has criticised the proposed changes to negative gearing, saying it would not generate enough of a budgetary saving to be worthwhile.

This story Administrator ready to work first appeared on Nanjing Night Net.

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