Source: Australian Property Journal
THE Labor party's policies on negative gearing and to half the capital gains tax discount to 25% will reduce the supply of new housing and decimate the property market, according to industry groups.
According to modelling prepared by Cadence Economics, if the policies are implemented, it will see up to 42,000 less new dwellings built across the country; up to 32,000 less full-time jobs; up to $11.8 billion less building activity and up to $210 million less renovation building activity.CEO Denita Wawn said Master Builders calls on the ALP to rethink their policies in the light of this new research and a changed housing market.
"Australia cannot afford for housing supply, building activity and employment to go backwards," she said."The results of the modelling show that within five years of Labor's property tax policy being implemented the construction of new housing would fall in all states and territories and employment would fall over the same period.
"On the other hand independent modelling by Cadence Economics shows that Labor's policy would mean up to 42,000 fewer new homes would be built over the five years following the implementation of Labor's policies, resulting in a reduction in the value of residential building activity of between $2.8 billion and $11.8 billion.
"Home renovations would also be hit by an expected reduction of between $50 million to $210 million in activity over a five year period. Inevitably this would mean a fall in employment which is expected to be between 7,200 and 32,000 less jobs across the country," Wawn added.
Meanwhile the Property Investment Professionals of Australia (PIPA) and the Property Investors Council of Australia (PICA) warned that the proposed changes will decimate the property market.
PIPA Chairman Peter Koulizos said the policy also showed the ALP failed to understand and appreciate the vital part investors play in the property sector."Property investors provide housing for 30% of Australians at a time when spending on social housing is at an all-time low," he said.
PICA Chairman Ben Kingsley said it was imperative that all levels of government stopped using investors as a never-ending cash cow."There seems to be a fundamental misunderstanding of the laws of demand and supply in Labour's approach to property taxation," he said.
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