Negative gearing battle rages on as Liberals warn of house price ‘whack’

Sydney was singled out as a city that would be hit hard. Home values are currently in freefall across much of Sydney and are predicted to bottom out in the first half of 2020.

This follows a lash out from Prime Minister Scott Morrison yesterday, who said key capital city markets can expect a “concrete landing” if Labor’s proposals come to fruition.

While there’s plenty of modelling in the market that backs the Liberal Party’s projections, including from SQM Research, some tax experts aren’t convinced of the doomsday predictions. 

For example, The Tax Institute’s Professor Robert Deutsch thinks there will be a disruption but, broadly, the housing market will remain healthy. Mr Deutsch considers the fact that Labor’s proposals will cover all manner of investments, not just property.

“If all asset classes are targeted, then it doesn’t mean property has a problem,” said Mr Deutsch.

At this stage, the proposals are just that, proposals. As Mr Deutsch previously said, “the devil is in the details”, and projections can’t be certain until legislation is drafted.