Reserve Bank makes it clear - investment housing taxes need review
The Australian Democrats say the call by the Reserve Bank for a review of the tax breaks available to property investors means the issue can no longer be ignored by the federal Liberal and Labor parties.
Democrats' Leader, Senator Andrew Bartlett, said the Reserve Bank's submission to the Productivity Commission inquiry into First Home Ownership clearly highlights that opportunities for tax minimisation have been driving investors into the market, pushing up prices and pushing ordinary home buyers out."
"There is absolutely no doubt that unrestricted access to negative gearing for property investors and the huge cuts to capital gains tax passed by Liberal and Labor a few years ago are major contributors to the current crisis in housing affordability.
"The fact is that both Labor and Liberal have not had the guts to tackle the difficult but necessary issues at federal level that are major contributors to this crisis."
"The Government's insistence on turning a blind eye to the rocketing price of housing has left many people who are simply trying to buy a home being saddled with massive debt, and has priced many home buyers either out of the market or forced into areas away from jobs and services."
"The Reserve Bank also draws attention to the aggressive property seminar industry and the need for regulation of the industry and some of the products it promotes. The unregulated use of deposit bonds, for instance, has meant that many investors can purchase off-the-plan with less than 1% of the total purchase price."
"The Democrats repeat our call for a proper look at all the issues that are contributing to the crisis in housing affordability, including open ended negative gearing, capital gains tax incentives, and poorly targeted but expensive measures such as the First Home Owners grant. We cannot afford a piecemeal approach."
"Those who cannot afford home ownership must have access to affordable housing. We need a mix of tax incentives and public funding to ensure low income earners are provided with affordable and appropriate housing. This is something the current investment boom has completely failed to do.
"The continuing decision of Labor and Liberal to put this in the too hard basket will simply continue to leave affordable, secure housing out of the reach of millions of Australians and leave many more dangerously exposed to high debt levels.
"The Democrats pledge to support any tax changes in the Senate that will go some way to address this major issue."
