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Don't change negative gearing policy: REIA

by Staff Reporter11 minute read

Staff Reporter

While there is growing speculation that the government could be set to change its policy surrounding negative gearing, the Real Estate Institute of Australia (REIA) believes any changes would be detrimental.

REIA president Peter Bushby said the government should retain negative gearing for property investment in its current form.

“Recent chatter suggesting there are changes in the wind is extremely concerning and would negatively impact the supply of housing and the level of rents in an already tight rental market,” he said.


“It would adversely affect the most disadvantaged in our community, who are caught in the rental trap while facing a long wait for social housing.

“We need to remember what happened in 1985 when the Hawke government abolished negative gearing for property, only to bring it back in 1987.

“During that period, rents increased by 57.5 per cent in Sydney, by 38.2 per cent in Perth and by 32.0 per cent in Brisbane.

“It is important to know that the 2010 Henry Review stated that any changes to negative gearing arrangements should only occur after reforms to the supply of housing and to housing assistance.

"Current arrangements in addressing the supply of rental accommodation are complementary to the government’s goal of increasing the supply of rental property.

“Negative gearing could be the difference between investing or not in rental housing in a subdued market, as is the case at present. Any tweaking to the current taxation arrangements could tip the balance against property investment.”

Mr Bushby said the view that negative gearing is only for wealthy investors, is a myth.

According to Australian Taxation Office (ATO) data, around 80 per cent of the total individual taxpayers who claimed a tax deduction for property, earned less than $80,000 per annum.

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