THIS is CAAN’s response to ‘NSW takes aim at capital gains tax breaks for property investors in bid to help first-home buyers’
JUST when one gets their hopes up with … of all things … NSW INC taking a shot at the Feds for Capital Gains Tax (CGT) Breaks for property investors!
The 50% capital gains tax discount which provides a large tax break for investors selling homes they have owned for 12 months or more! It means these investors only have to pay tax on half of the profit made when they sell.
Smoke and mirrors …
But are NSW serious?
Nah … we are not Economists, but soon see through this … it’s been Trumped up to look like NSW INC is on our side, but
there would be no CGT if it were not for NEGATIVE GEARING in the first place …
We know some property investors who have 5, 10, 50 or more ‘homes’ under their belt … and multiply that by the number of property investors, and one can readily see why there is a shortage of homes for First Home Buyers … any Home Buyers!
The NSW Submission suggested that the combined effect of negative gearing and CGT was likely to be a moderate increase in house prices …
DESPITE the more than 20% house price increase already over 2021!
It acknowledged the displacement of owner-occupiers from owning a home by the tax incentivised wealthy investors!
NSW INC merely suggests the policy be reviewed …
What does an ‘appropriate balance between the purchases of properties for owner-occupied and investment reasons’ mean?
Months ago First Home Buyers fell by the wayside … it was only those who had wealthy parents to back them with some $90,000 who got into the housing market earlier this year
The median house price in Sydney is more than $1.3M compare that figure to those who sold in late 2020 for say $1.3 – $1.8M … many are still searching, and far beyond Sydney
NSW INC recognised that super low interest rates and government grants allegedly to help FHBs have in fact pushed up house prices.
And submitted that the Federal Government ‘holds the levers that could be improving affordability.’
So what is holding the Liberal Coalition back?
Do they fear criticism from their voter base … by acknowledging that what Labor took to the 2019 Election was correct, and would have prevented the Housing Affordability Crisis now being experienced?
Labor’s policy provided the levers to address this, and would have done no harm to property investors as their investments were to be grandfathered.
What does ‘grandfather’ mean? It would allow investors to continue benefiting from their property investments as they did before. They could keep their investment properties if they so chose.
And in fact they were encouraged to invest in ‘new homes’ which benefited both investors and the development sector! A win/win!!
It meant that if investors were to sell established homes this increased the supply for the home buyer market (esp. FHBs)
What of the Fair Go?
In 2019 the Liberal Coalition ran a fear campaign about Labor’s proposed changes to Negative Gearing and Capital Gains Tax … Morrison alleged such changes would make for a housing market crash …
NOW housing despite much of the stock being of a lesser quality is selling at super inflated prices.
No doubt this has come back to bite many that were duped by this Liberal campaign …
Many now having handed over their nest egg to their children for a home deposit … others are housing their children and grandchildren as their homes become Kindies, and are being trashed …
Wages are low, and this can make saving for a deposit nigh impossible … and we have shared numerous reports about why wages are low …
We have a crisis now here in Australia of unaffordable housing as ‘the Party Dries’ call for a return to high immigration (Visa manipulation) allegedly to improve the economy with even more competition for housing!
Meanwhile the Build-to-Rent Sector is quietly growing as investors seek to grow their wealth at the expense of life-time tenancy … even for young professionals …
Liberal chair of the Housing Affordability Inquiry
MP Jason Falinski acknowledged the impact on Australians under 40 (Millennials and others) but merely proposes to look at CGT … he suggests that this tax discount applies to all assets not just property …
Somewhat dismissive it appears Falinski suggests that economists have looked at the CG tax concession for housing and that its impact is between a mere 1 and 4%
The Big Porky!
Falinski trots out the same old … same old of ‘planning’ behind the housing affordability issues
And ‘supply’ which is what the devil-opers say … they always want more …
Further, suggesting this fell to the NSW Government planning system as more and more forests are felled for housing to meet the overseas migration demand … because a whole Cohort of Australians under 40 are locked out
What has blinkered Falinski in suggesting that NSW is responsible when the Federal Liberal Coalition policies since 2013 have meant that high immigration has led to an increased demand for housing.
Prior to the Pandemic there were 2.3 Million Visa holders in Australia … no mention of this by the PM when he said he cut permanent migration by a mere 30,000 to 160,000 p.a.
1.6 Million of these Visa holders were workers competing in our jobs market which has contributed to Australia’s low wages growth
It would seem with property investor portfolios, foreign property investor portfolios, and high immigration that is why there is an undersupply of homes for any Australian home buyers …
NSW Government wants to scrap Stamp Duty for a Land Tax
True, Stamp Duty is a major additional cost for Home Buyers, but Land Tax is another annual expense like Council Rates … and it is forever!
NSW INC has described Stamp Duty as the state’s ‘most inefficient tax’! It adds 2 and a half years for a full-time worker to save for a deposit! Falinksi agreed Stamp Duty should go however he proposes the current cheap finance would eliminate the need for Federal Government help!
IT would seem that the Tax system needs revision whereby Tax Benefits, Tax Avoidance and Tax Minimisation ought be addressed urgently rather than hitting Home Buyers with either stamp duty or land tax!
COMMUNITY ACTION ALLIANCE FOR NSW (CAAN): HOUSING INEQUALITY WITH AUSSIES LOCKED OUT! 