REIWA president Hayden Groves warned Labor’s policy on negative gearing would see first home buyers and investors compete to purchase newly built homes.
Labor’s changes would limit negative gearing to new housing from July 1 2017 and exclude investments made before this date.
Mr Groves said If investors did not buy established properties they will look at other investment opportunities where there will be a better return.
Currently, the WA first home buyers grant is set at $10,000 for new properties which Mr Groves said makes up 60 per cent of the market in the new and build class.
He said 80 per cent of people who had an investment property were mum and dad investors with one property, the average tax deduction for these investors was $2000.
“They hang onto the property for as long as they can and have an asset paid off to give them an income during retirement so they are less reliant on the pension,” he said.
Opposition leader Bill Shorten said negative gearing tax concessions were disproportionately going to the wealthy.
“I do not think it's right that the wealthy in Australia get a disproportionate amount of taxpayer subsidies and you've got everyday Australians battling to put food on the plate,” he said.
According to Labor, negative gearing will cost $10 billion this year which is more than what is spent on education and childcare in Australia.
Statistics from the University of Canberra show the top 20 per cent of income earners receiving almost half of the negative gearing benefits with the top 10 per cent getting more benefits than the bottom 60 per cent.
Forrest MP Nola Marino said there were 9085 people in the electorate who used negative gearing with an average rental loss of $7995.
“If they were not able to negatively gear, those on the middle income tax bracket of 32.5 cents would face an annual tax increase of $2598,” she said.
Have your say: What do you think about negative gearing? Email emma.kirk@fairfaxmedia.com.au.
