Scrap negative gearing
Posted by clubwah on April 4, 2008
The World Today on ABC local radio, had a story today about the severe shortage of rental properties in capital cities. The report said that in Sydney, it’s not uncommon to have 50 people inspect one rental property and for some people to pay up to a year in advance to secure the property. The report also said it’s not uncommon for people to offer $40 above the asking weekly rental rate, to beat others to it.
With house prices at all time high levels, more people, than ever being squeezed out of the housing market, housing construction not being able to keep up with demand and a shortage of rental properties, then surely it’s time for the government to review or even abolish negative gearing.
The defence of subsidising people to invest money in property is that it saves the government from having to provide more public housing - not that many people on the public housing list are going to afford an apartment in Docklands.
However that rental properties are in such short supply shows that this money is being wasted. Interesting how people are offended that their tax dollars could be spent on compensation for Aborigines or a rail link in the western suburbs, but have no qualms about it being used to help enhance the wealth of baby boomers.
We shouldn’t be giving tax breaks to people making a killing from the rental market.
Scrapping negative gearing, or limiting it to people who lease out housing at the more affordable end of the market, would be incredibly politically unpopular, but it’s time the government looked at reforming the main reason for Australia’s housing crisis and is contributing to high inflation.
Posted in Politics, Uncategorized | Tagged: Australia, Government, tax, negative gearing, property, real estate, reserve bank, rentals, investing, wealth creation, tax reform, inflation | 12 Comments »

