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Negative gearing – who gains most?

Negative gearing distorting Australian residential market

Research by Matt Grudnoff of The Australia Institute (April 2015) found that: 

‘The combination of negative gearing and the capital gains tax (CGT) discount is distorting the Australian residential property market, encouraging speculative behaviour and being used by predominately high income households as a tax shelter.

‘Modelling commissioned by The Australia Institute shows that these tax perks are costing tax payers $7.7 billion per year.

‘The modelling also shows that the majority of the benefits of negative gearing and the CGT discount are not going to middle Australia but rather to high income earners. 56 per cent goes to the top 10 per cent of income households and 67 per cent goes to the top 20 per cent. By comparison relatively little flows to low income households with just four per cent going to the bottom 20 per cent of households. The bottom half of Australian households only get 13 per cent of the benefits.’

How the Property Council is shaping the debate around negative gearing, taxes

Nicole Gurran and Peter Phibbs write in The Conversation (17.6.16) about the inflluence of the Property Council over the Federal Government:

‘The financial stakes are high when it comes to lobbying for regulatory settings which favour property development and investment.

‘The Property Council’s healthy budget for advocacy and communication ($6.4 million and $1 million in 2015 alone) has generated a voluminous amount of reports, advertising campaigns and government submissions on taxation and planning reform. Another $7.2 million for “networking” ensures that this information is disseminated where it counts.’

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