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Will Negative Gearing Be Abolished?

 

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Negative gearing is very much under the microscope currently with strong indications that it will be abolished…

If we learnt anything from 1985, it should be that it can be very detrimental to our economy, which currently is already fragile. For those who can’t recall, the abolishment of negative gearing in 1985 only remained in place for just over a year until the Labour leaders of the time had to rapidly reintroduce negative gearing. The abolishment caused a major slow down across the whole economy and this was in times when our whole economy was extremely strong. 

The leaders of the day swiftly came to the conclusion that tax payers couldn’t afford to take over the social housing system which was assisted by private developers and investors by subsidising further social housing to accommodate those Australians not fortunate enough to own their own home.

Any significant changes to any protected or subsided industry should always be implemented over a long lead in period to ensure minimum disruption and ongoing consequences to the whole economy.

As the real estate and building sectors are one of the biggest drivers of the Australia economy it would be very prudent for more research be conducted before the abolishment of such significant tax reform.

Here is some further statistics produced by REIWA which provides some interesting reading.

neg gearing

 

Source Mark Hay
June 30, 2016
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