Senate called to act on tax breaks and negative gearing
A SENATE inquiry will be urged to recommend dumping tax breaks for housing investors and make wide-ranging reforms to negative gearing if it is serious about addressing housing affordability.
The inquiry will hold a hearing in Melbourne on Tuesday, with a group of experts from the Swinburne Institute for Social Research to propose vast changes to housing investment tax breaks.
A submission from the researchers given to the inquiry has laid the blame for a lack of reform to address housing affordability on three key issues.
The group will tell the Senate inquiry reform has been hampered by "a lack of political will", "too many reviews and not enough reform" and a "need for evidence and not rent-seeking".
"It is important to reform negative gearing and with a reduction in income tax revenue forgone, there should be scope to provide some additional funding for social and affordable housing," the submission reads.
"Political realities might mean exemption for all existing property owners from reforms but for new investor/owners after some designated date the reforms could come into effect."
To address the rising barriers to first-home owners entering the property market, it has proposed abolishing the 50% capital gains tax break for non-home occupiers.
Institute academics also proposed a way forward for changes to negative gearing that would not be politically fraught, including a potential exemption for existing property owners from reforms.
But the submission does recommend reforms to the tax break, including quarantining of tax to rental income, not all income; and making negative gearing available only to newly built homes to help add to housing supply.
The group also highlighted that there would be "no political will" for reform of national housing policies "so long as there are no perceived votes in the issue".
"For policy traction some form of leadership is required to turn it into an electoral issue," the submission reads. - APN NEWSDESK