Malcolm Turnbull: Negative Gearing to be axed?
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With Malcolm Turnbull taking over the helm as Prime Minister, the topic of negative gearing is bound to come up again.
This article was written by Darryl Simms and first appeared on LinkedIn Pulse
Each time the topic of negative gearing is raised there are varying views of the benefits and whether it should be axed in full or at least in part.
Before we delve into negative gearing lets briefly look at current views from each political party.
Liberal:
In recent times Joe Hockey stated that negative gearing would remain in place as the removal of it would most likely cause landlords to raise rents which would have a negative impact on tenants. This is all well and good, however, with a new Treasurer just around the corner you can be sure that the topic will once again be revisited.
Labour:
Labour has recently indicated they would consider making changes to the current negative gearing legislation if it wins the next election. One option to consider will be to only allow negative gearing to be used on new properties to encourage the construction of new housing.
The Greens:
The Greens have indicated they would allow negative gearing to continue on properties that are already owned by investors. Negative gearing on future purchases after a certain date would not be allowed.
What will be axed?
At this point in time it would seem that regardless of which political party is in office, it is most likely that negative gearing would be retained for existing property investors.
The axing, or even simply talking about axing negative gearing on existing investment properties, would create severe political backlash.
What does this mean?
For existing property investors, you can probably relax and breathe easy as your investment property will most likely be unaffected by new policy.
The government are well aware of the need to continue to stimulate construction of new housing which means it is highly likely that negative gearing would remain in place for new properties.
With this in mind, if you are thinking about buying an investment property you probably should give serious consideration to new properties rather than established.
Newly constructed or Off The Plan properties will likely stand a much stronger chance of retaining negative gearing and therefore deliver you much better tax benefits.
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This article was written by Darryl Simms and first appeared on LinkedIn Pulse