Why the tradies will influence the 2016 election result: Nicholas Proud

Why the tradies will influence the 2016 election result: Nicholas Proud
Why the tradies will influence the 2016 election result: Nicholas Proud

The upkeep and maintenance of rental properties by tradespeople and maintenance workers is directly related to the tax offset of "Other Rental Deductions" according to Nicholas Proud, principal, Property and Construction Analytics Australia.

He said the most recent ATO Taxation data saw Other Rental Deductions soar to $18.376 billion for 2013-14 which via negative gearing drives repairs and maintenance activity in such a way that should see tradies taking more than a casual interest in the result of the July 2 election.

“Outside of council rates, water charges , travel and insurances there are a lot of plumbers, sparkies, chippies and other asset maintenance workers such as cleaners, gardeners and handymen whose work makes up this Other Rental Deductions figure that can be claimed by property owners at tax time," he said.

“Unlike any election before the value of this type of work assisted by negative gearing concessions is at record levels.

“In contrast to other elections, annual Other Rental Deductions in 1996 sat at $4.55 billion at the time of the election of the Howard Government, it has risen by $13.83 billion per annum since then. Even more recently, since the 2007 election of the Rudd Government the annual value of Other Rental Deductions declared has increased by $6.82 billion.

“What hasn’t been factored into account really is the impact on those smaller handy trades that comprise a significant part of the property and construction workforce if the negative gearing concession is changed or quarantined to new dwellings only.

 

Taxable Income

Other Rental Deductions

Other Rental Deductions No.

Average Deduction

%

Less than or equal to $18,200

$2,253,074,560

277,693

$8,114

14%

$18,201 to $37,000

$2,325,522,579

314,028

$7,405

16%

$37,001 to $80,000

$5,632,316,431

702,735

$8,015

35%

$80,001 to $180,000

$5,686,914,423

575,554

$9,881

29%

$180,000 or more

$2,479,123,491

149,268

$16,609

7%

Total

$18,376,951,484

2,019,278.00

 

 

 

“By income, those on a taxable income under $180,000 are likely to declare an Other Rental Deduction under $10,000.

“Across the electorates, 126 out of the 150 lower house seats on average declared an Other Rental Deduction under $10,000.

“If negative gearing was quarantined to new homes only there would be no concession for  the upkeep of existing homes, which are the homes that most need the reinvestment.

“With no offset it is likely that only those repairs and maintenance that are most fundamental to the upkeep of the property will be made which not only will reduce activity and also have the potential to reduce the quality of rental stocks in the lower yield suburbs which would be detrimental to tenants.

“Exactly how many entry-level handy jobs and low-level trades maintenance workers would go is difficult to say, but the growth in this deduction since 1995-96 shows a reasonable baseline to consider the scale of any such decline."

Tags: 
Renovations Tradespeople

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