Labor is being called on to explain the modelling of its negative gearing policy, as new figures suggest the numbers don't stack up.
The Property Investors Council of Australia and its chairman Ben Kingsley said Labor needs to “urgently authorise” the Parliamentary Budget Office to release the modelling assumptions for their taxation policies.
Mr Kingsley said Labor’s policy fails to include off-the-plan and house-and-land packages in its estimation that more than 90 per cent of new investment loans are to people purchasing existing housing stock.
“Just today, Australia’s biggest aggregator, AFG – with over 2,900 mortgage brokers – confirmed its mortgage application data for new investment purchases vs existing property was 43 per cent new and 57 per cent existing,” he said.
“This seriously puts into question Labor’s logic in crafting the policy and absolutely challenges their revenue assumptions.”
Mr Kingsley added that Labor’s taxation policies could potentially alter the property market significantly, so their policies must be reliant on accurate data.
“If Labor has nothing to hide, then this is a straightforward exercise in full disclosure so all property owners can understand their reasoning for such significant reform,” said Mr Kingsley.
If the data is inaccurate, he said that action needs to be taken as soon as possible.
“We need to address this immediately, as it is very much in the interest of the 10 million plus property owners that are going to see the values of their property fall to pieces across Australia.”
If elected in the upcoming federal election in May, a Labor government would enact their negative gearing policy by 1 January 2020.