West Australian: Property sector blasts Labor plan
WA property groups fear changes by the Labor Party to negative gearing and capital gains tax will hurt the housing market and deliver a “double whammy” to mum and dad investors.
But backers of the changes have accused opponents of trying to talk up a scare campaign around policies that had failed to underpin property across the country.
The ALP has promised to restrict property negative gearing — the ability to offset losses on rental properties against all other income — to new homes from 1 July next year.
It is also planning to halve the 50 per cent concession on capital gains tax for assets held for more than 12 months. It says the changes will save $32 billion over the next decade.
But WA Property Council executive director Joe Lenzo said the change had the potential to drive up Perth rents and distort the investment decisions of ordinary people.
He said the combination of the restriction to just new homes, and halving the CGT concession, would hurt the transaction side of the real estate industry and the investments made by people in existing property.
“This will flow through the economy, into the trades area and right across investment decisions,” he said. “Over time the amount of investment into rental properties will fall and go somewhere else.”
Real Estate Institute of WA President Hayden Groves said the policy could force landlords to sell their properties, pushing down prices in a market that was already soft.
Source: West Australian