PIPA speaks out on proposed negative gearing policy.

The Property Investment Professionals of Australia (PIPA) has warned that the Australian Labor Party’s (ALP’s) proposed policy changes to negative gearing are hinged on insufficient economic modelling and broad assumptions.

“The models are dangerously misleading. Such major reform requires comprehensive and detailed modelling. Until there is real evidence to support such a policy, which industry experience tells us doesn’t exist, the opposition should be very careful about changing negative gearing and capital gains tax provisions.”

“Our message is clear – $6.5 trillion[1] worth of Australians’ wealth is tied up in property. That’s roughly three times that held in superannuation and equities. Don’t play with this unless you know what you’re doing.”

Mr Kingsley said the ability to claim expenses associated with a geared business or investment was a principal foundation of the Australian tax system.

“This policy should not be changed in isolation, outside of a complete review of the nation’s taxation policy,” he said.

“Property investment plays an important role in supporting Australians in their pursuit to be self-sufficient retirees and reduce the burden on the public purse to support an ageing population. Moreover, the property market is a significant contributor to economic activity, providing one in four jobs in our economy.

“Labor’s proposed removal of negative gearing on established housing is a poorly-informed policy that will drive property price reductions, increase rents, stifle new property construction, rather than encourage it and cause job losses. Is that a good policy?”

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