Ensure you never miss an issue of the
real estate business bulletin
Negative gearing not a ‘perk for the rich’

Negative gearing not a ‘perk for the rich’

by Elyse Perrau 0 comments

The most vulnerable in society will be hit the hardest by the elimination of negative gearing and the side effect of increasing rents, says a real estate network chief.

The most vulnerable in society will be hit the hardest by the elimination of negative gearing and the side effect of increasing rents, says a real estate network chief.

Ray Ellis, First National Real Estate's chief executive, said suggestions negative gearing is a “perk for the rich” are “misguided”.

“The current taxation arrangements offer Australians the opportunity to invest in real estate as a way of saving for independence in retirement,” he said.

“However, with the average property investor owning just one rental property and having an income no higher than $80,000, suggestions that the rich are exploiting negative gearing are an exaggeration.”

Mr Ellis said if it was eliminated in the next Budget, the most vulnerable in Australia could soon see unaffordable rental prices.

“The great Australian dream is to own your own home and it is important we remember just about every Australian begins his or her journey to property ownership as a tenant in a rental property,” he said.

“If negative gearing were removed in an environment of the lowest interest rates since the 1950s, Australians would be unlikely to continue to invest in rental properties at current rates.”

Mr Ellis said investors would then seek better returns elsewhere and, with population growth near record highs, the supply of rental properties would fall short of demand, thereby forcing up rents.

“This would place unacceptable pressure on the most vulnerable citizens in our community,” he said.

“It would also lengthen the amount of time it takes for first home buyers who are renting to save a deposit to buy their first home.”

[Related: Scrap negative gearing at your peril, REIA warns]

 

 

Negative gearing not a ‘perk for the rich’
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
The difference between an average agent and one who dominates

McGrath Crows Nest’s Peter Chauncy is number 10 in this year’s REB Top 100 Agents ranking. Peter, however, is more likely not surprised ...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?