Builder calls for change to negative gearing
A LEADING figure in the Grafton building industry urges the Turnbull Government to consider new rules that would only apply negative gearing to new home builds.
With negative gearing shaping as a key battleground in the Federal Election later this year GJGardner Homes Grafton owner Micah Middelbosch said a change of this kind would not only help boost the economy, but would also improve housing affordability for middle-income earners and alleviate the rental crisis.
"The biggest obstacle to housing affordability in this country is lack of supply," Mr Middelbosch said.
"Data from the Australian Bureau of Statistics shows that 92% of negatively geared investment in Australia is used to purchase existing dwellings, not new builds.
"This has the effect of reducing the amount of property left on the market for first home buyers with modest budgets.
"If negative gearing only applied to new builds, new jobs and growth would be created in the building industry overnight, which would stimulate the economy."
Should there be changes to negative gearing?
This poll ended on 11 May 2016.
Yes. It only benefits richer people
No. It allows ordinary people to invest
Yes. But only gradually
No. It will hurt home prices
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.
The proposed changes to negative gearing were recently touted by Richard Holden, Professor of Economics at the University of NSW, in his June 2015 report titled 'Switching Gears', commissioned by the McKell Institute.
Holden's report proposed the new rules apply from July 2017, but not affect existing investors taking advantage of current negative gearing arrangements.
Mr Middelbosch said a new report released by the Housing Institute of Australia (HIA) a week ago, reinforced the urgency of negative gearing reform.
"The HIA report records a 5.3% cent slump in new home builds across the country," he said.
"This makes little sense in a market suffering from a shortage in housing.
"More must be done to incentivise investment in residential construction."
"A change to negative gearing would have an immediate impact on the industry and we hope the government can also see the benefits."