Some interesting research on how the abolishment of negative gearing and capital gains tax discount would result in less investment and rents to increase. Investors finance around a third of all new home dwelling construction and the various incentives are helping boost the supply of new homes, enabling many Australians to enter the property market.
Property Council chief executive Ken Morrison says negative gearing and CGT “tick all the boxes by increasing supply, giving people an opportunity to get into the housing market and helping ordinary Australians build wealth for their future”. “The reality is that if negative gearing was abolished there would less investment and rents would go up,” Morrison says. The report warns that the immediate removal of negative gearing without allowing to carry forward losses is likely to result in a portion of the average net rental loss being added to rental prices. In 2012-13, this was an average of $9500.