News

In recent months, a policy to get rid of negative gearing on existing residential property and increase capital gains tax has been all over the media.

It is difficult to wade through the minefield of effects that these changes will have.  Some of the concerns relate to

- the flow on effects to reduced house pricing

- possibility of reduced value of super funds

- possibiltiy of a large exodus of property investors from the market - will this create a housing shortage and push up rents?

Those against the change is a coalition of 16 real estate agency groups who have come together under the banner of the Real Estate Institute of Australia to launch a website www.negativegearingaffectseveryone.com  campaigning for no change to the existing arrangements. 

Those on the other side of the fence beleive that abolishing negative gearing may;

- reduce house prices, thus creating more affordability for first home buyers

- encourage investment in other areas

- encourage investment in NEW homes (versus old), thus boosting the economy

Clearly a very tricky subject to speculate upon and one that we will only really see the effects of if and when a change is made.