One of Australia’s political parties has announced it will push for an end to the “fundamentally unfair” negative gearing policy in Australia.
The Greens have proposed to remove negative gearing for new investment properties and to invest the savings in social and public housing instead.
This policy would only apply to properties purchased after 1 July 2015 – properties bought before that date would be unaffected by the new rules.
According to the Greens, the Parliamentary Budget Office (PBO) estimates the policy would save almost $2.9 billion out to 2017-2018.
The Greens would use that revenue to directly fund construction of 7,000 new homes for the homeless and 7,500 new social housing dwellings.
Deputy leader Scott Ludlam said negative gearing is “fundamentally unfair” because it forces low- and middle-income Australians to subsidise richer property investors.
“It is time to call an end to this skewed concession that has contributed to the housing bubble and provides a tax benefit 10 times greater for the highest income earners than for the lowest,” Senator Ludlam said.
The Greens have also asked the PBO to examine capital gains tax concessions, which Mr Ludlam said are “overwhelmingly subsidised by low- and middle-income taxpayers”.
Negative gearing has been in the news a lot in the past few months as the property boom in Sydney and Melbourne has made housing affordability a significant political issue.
Treasurer Joe Hockey has ruled out abolishing negative gearing – shadow treasurer Chris Bowen has said it is highly unlikely that any party would entirely scrap the policy, but that Labor might propose some amendments at the next election.
The Australian Council of Social Service released a report in April that claimed negative gearing worsens housing affordability.
However, this was contradicted by the Housing Industry Association, which claims that removing negative gearing would reduce affordability and lower living standards.