The Liberal government organised a roundtable with many of Australia’s top property experts to discuss what changes to negative gearing and capital gains tax would mean for the property market.
The roundtable, which occurred on Monday, was convened by Senator Zed Seselia, the assistant minister for Treasury and finance, and was joined by the Prime Minister and the Treasurer, focused on what could occur to Ausatralia’s property market if Labor’s proposed negative gearing and capital gains tax changes are enacted.
Peter Koulizos, chairman of the Property Investment Professionals of Australia, was one of the experts in attendance, and saw the roundtable as a positive conversation.
“We all have basically the same message, [which] was, if this is introduced, this is going to be very bad for the property market and the economy,” Mr Koulizos said to Smart Property Investment.
“You only have to go back to 1985 when the Labor party did virtually exactly the same thing and fiddled with negative gearing and introduced capital gains tax, where property prices dropped by 10 per cent for the next two years and building starts dropped by 27 per cent.”
Meanwhile, Mr Koulizos viewed the Liberal party’s current property tax policy as ‘Let’s not change anything’, with policies in the past focusing on smaller, more subtle changes.
“What the Liberal party’s done over the last few years, through APRA, is tighten lending, slow down the property market; APRA required banks to give out loans to investors at a higher interest rate, investors needed a bigger deposit; so all of these things are very subtle changes, which doesn't provide a huge shock for the property market,” he said.
“These are slow burning measures. Whereas, what the Labor party is proposing, it is going to be a train wreck.”
Mr Koulizos also added that he would love for the Labor party to provide him and the other experts the same opportunity to discuss the impact of their policy with them, but have not yet been invited to do so as of yet.
The Property Council of Australia CEO Ken Morrison was another member of the roundtable; he said it was a valuable opportunity for the government to listen to the property industry.
“It’s not the time to be making changes to negative gearing or capital gains tax that undermine investor confidence in new or established housing which helps meet the housing needs of the one-third of Australian households who rent,” Mr Morrison said.
“Nine of out 10 property investors own just one or two investment properties, with the overwhelming majority owning a single investment property.
“Supported by the current taxation arrangements, they play a vital role in meeting demand for rental housing.”
To further encouragement in property investment, Mr Morrison added that negative gearing and capital gains tax should be left alone in order to support an investor’s own retirement and to meet the housing needs of other Australians.