• REIA urges Government to retain negative gearing

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    photo-tablet-documentsThe Real Estate Institute of Australia (REIA) has urged the Government to retain negative gearing to encourage property investment and place downward pressure on rents in its pre-budget submission.

    REIA Chief Executive Officer Amanda Lynch said evidence was clear that both negative gearing and capital gains tax (CGT) discount were feeding the supply of housing stock during a time of chronic under-supply in Australia.

    “Any alteration to the current arrangements would likely result in a need for a greater investment by the Government in social housing and could potentially increase rents - as recognised by the Henry Tax Review in 2010, which stated that the current provisions placed downward pressure on rents,” Ms Lynch said.

    REIWA President David Airey supported REIA's pre-budget submission and said negative gearing was a successful system that helped people build equity for their retirement years, while also providing rental accommodation in the housing system.

    “REIWA strongly supports negative gearing because it’s a way for people to invest in the property market. Given that 80 per cent of rental accommodation is provided by the private sector, mostly mum and dad investors, governments need to encourage this form of investment to help provide the nation’s housing needs. The Commonwealth and States cannot provide all the social and affordable housing needs in the community,” Mr Airey said.

    REIA’s pre-budget submission highlights eight recommendations aimed at contributing to Australia’s continuing economic development and productivity while attracting first home buyers back into the property market and improving housing affordability.

    The eight key areas REIA are seeking consideration on for the 2015/16 Budget are:

    • That conveyance stamp duties be abolished and replaced by an efficient source of revenue for states and territories.
    • That negative gearing be retained in its current form to encourage property investment.
    • That CGT on property investments is not increased.
    • That the Government take a leadership role in introducing a uniformed approach to the provision of assistance to first home buyers for both new and established homes.
    • That the Government establish a scheme to encourage young Australians to have access to their superannuation for the purpose of raising a deposit for a first home.
    • That the Government establish a mechanism to ensure the availability of reliable data on housing demand and supply to assist in formulating effective policies.
    • That the Government continue to fund the Industry Skills Fund to meet all skills shortages.
    • That the Government better utilise private investment to improve the supply of housing for social housing tenants transitioning to private rental.

    View REIA’s pre-budget submission.