Voters open-minded on investor tax break reform

Three in five Australian voters favour scaling back negative gearing and the capital gains tax discount, new polling suggests.

One in five want investment property tax breaks to stay the same, according to the polling by independent consultancy RedBridge Group on behalf of national housing affordability campaigners Everybody’s Home.

A further one-fifth of those surveyed were unsure.

Negative gearing allows investors to claim deductions on losses, while the capital gains tax discount halves the amount of excise paid by people who sell assets they have owned for 12 months or more.

Investor tax breaks are back in the headlines since the Greens promised to vote against Labor’s shared home equity scheme without substantive changes to negative gearing and the capital gains tax discount.

The federal government has ruled out such changes, leaving the future of its help-to-buy scheme in doubt.

Yet the pressure is on to find solutions to escalating housing affordability challenges with low vacancy rates and high demand pushing up rents and the dream of ownership drifting further out of reach for many first time buyers.

New research from the Australian Local Government Association (ALGA) raises concerns with another federal housing policy – the $500 million housing support program.

The program falls under the umbrella of a broader commitment across all levels of government to deliver 1.2 million homes over five years and was designed to help councils connect new homes with water, roads and other essential infrastructure.

But modelling suggests the $500 million housing program equates to $400 per home, based on the 1.2 million homes target, which councils say is far less than the amount it actually costs to connect a home to roads and the like.

In Mitchell Shire in Victoria, for example, the council says it can cost up to $130,000 to connect a new home on a greenfields site with the essential infrastructure it needs.

Given the scale of the gap, ALGA has joined forces with the Community Housing Industry Association and the National Growth Areas Alliance to call for a top up to the scheme in the federal budget in May.

The alliance want the support program boosted from $500 million to $750 million, with the extra money to be spent on making new housing developments more liveable, like with bike paths and libraries.

ALGA president Linda Scott said the program funding was vastly insufficient in the context of the 1.2 million homes target.

“Preparing new land releases will cost billions of dollars, with much of the pressure falling on a small number of councils that will be expected to take on the majority of new housing,” she said.

“While we desperately need more affordable housing, this has to be supported by local infrastructure and services that will enable healthy and connected communities, especially in regional and remote areas.”


Poppy Johnston
(Australian Associated Press)


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