Policemen negatively gear property: Treasurer Joe Hockey

Policemen negatively gear property: Treasurer Joe Hockey
Policemen negatively gear property: Treasurer Joe Hockey

The Federal Treasurer Joe Hockey has shrugged off the Reserve Bank call for a review of the negative gearing-capital gains tax regime.

"More policemen negatively gear than specialised tax accountants, management consultants or university lecturers," Mr Hockey told 2UE radio.

"This is a way for people on medium incomes, or even lower incomes, to be able to get into the property market in a way that they may not be able to."

The bank joined the debate over how negative gearing and the 50% capital gains tax discount are making housing less affordable.

"The bank believes there is a case for reviewing negative gearing but not in isolation," the RBA said in its submission to a House of Representative's parliamentary inquiry into home ownership.

Limiting negative gearing to new houses or a certain number of investment properties are among the changes Labor is reportedly considering.

The treasurers comments stem from analysis showng the vast majority of property investors taking advantage of negative gearing are “mum and dads” earning less than $80,000 a year, countering the long-held view that the property investment measure was a tax lurk for the rich.

Australian Taxation Office data shows that of the 1.266 million Australians who declared that the rental on their investment properties didn’t meet the interest repayment in 2011-12, 883,325 earned less than $80,000.

More than 70 per cent of people who accessed negative-gearing benefits only owned one investment property

About 60,000 clerical staff earning less than $80,000 benefited from negative gearing, as did 54,000 teachers, 46,000 sales staff and 35,590 nurses and midwives, the data showed as reported by The Australian. 

Nick Proud, the executive ­director of the Residential Development Council, which provided the statistics suggested investors incentivised by negative gearing would reduce the future reliance on the pension.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
tax Negative gearing

Comments

Be the first one to comment on this article
What would you like to say about this project?