I commend the Labor government for at last proposing to reduce or remove the capital gains tax concession on property.
This action will inject much needed extra funding into the economy as well as reducing the ever-growing gulf between the wealthy and the poor. It may also help to bring down the price of housing.
Negative gearing has contributed to high accommodation price rises due to the increased take-up of property by investors. If limits were placed on negative gearing, such as only allowing it on one property and phasing it out on additional properties, it would become a less attractive investment and this would mean more accommodation would be available for owner-occupiers. This action would inevitably bring down prices.
Both the above tax adjustments would bring down housing prices and this would be of benefit to first home buyers but not to many property owners who would see their investment in the property market fall.
The latter group should reflect on the fact that they are benefitting from these tax breaks at the expense of the next generation.
It is about time we considered the impact of the above tax concessions on the inability of many of the next generation to own their home.
I have personally owned investment properties and benefitted from the tax breaks. However, my adult children have experienced difficulty in entering the housing market without my financial assistance which was available as a result of the tax breaks on owning properties. Those who did not own investment properties might not have been able to provide this assistance.
At the last election the government announced that it would not change capital gains tax and negative gearing concessions on properties. However, the price of housing has increased so much since then that all action to reduce property prices becomes much more urgent.
The number of individuals and companies that have invested in the property market will mean that there is likely to be strong opposition to these tax changes for personal financial reasons. It is the role of a strong and visionary government to make the much-needed changes. Does this government have the wisdom and courage to make these changes happen?
Chris Abraham, Mullumbimby
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