Political instability at home and abroad and the realisation there are more demands on government than ever before, are reminding us of the importance of securing our own financial futures.
For generations, Australians from all walks of life have used property as a means of building wealth. Currently, over two million Australians own an investment property.
In the lower North Shore – in North Sydney, Lane Cove, St Leonards, Kirribilli and its surrounds about 19,000 people own investment properties.
Locally, about 10,700 investment property owners negative gear. In other words, for these people, their rental income is not currently meeting the expenses of holding a property.
Mostly, that’s for a season, as people incrementally pay off their mortgage and work for the day when the property is paying itself off.
Over 1.2 million Australians negative gear including 61,400 retail workers, 48,900 teachers, 33,700 nurses and midwives, 23,000 hospitality workers and 9,100 emergency services personnel. Owning an investment property is the working person’s means of building prosperity.
Over 760,000 Australians who negative gear have taxable incomes below $80,000 demonstrating the widespread use of property as a means of building wealth.
It should not be forgotten that the 2 million Australians who own an investment property are providing needed rental accommodation to the Australian property market. Last year, property investors funded about 58,000 new constructions nationwide.
Negative gearing has been part of the taxation system for over a century. It’s allowed millions of homes to be built, including a record 215,000 building commencements last year.
As a rule of thumb, the construction of a single home involves up to 40 trades and sub trades providing jobs to plumbers, bricklayers, carpenters, surveyors, electricians, carpet layers, landscape gardeners and a host of other trades.
The property industry provides 1.1 million Australians with jobs, which is more than the mining and manufacturing sectors combined, and changes to negative gearing will put jobs at risk.
Already property owners pay $72 billion a year in local, state and federal property taxes. Changes to negative gearing and capital gains tax are expected to collect an addition $32 billion over the next ten years.
Under these proposals, you’ll pay tax when you buy property, you’ll pay tax as you hold property and you’ll pay double the tax when you sell the property.
We are opposed to plans to scrap negative gearing and cut the capital gains tax concession because they are a risk to jobs, investment and to the property market.
It is simply not worth the economic risk.
