The Property Council of Australia has welcomed the Federal Government’s Budget decision to leave current negative gearing arrangements in place.
SA Executive Director of the Property Council Daniel Gannon said the 2016-17 Budget forecasts for growth and jobs depend on continued strong performance by the construction sector.
“This Budget confirms that the continued strong performance of the property industry is vital if South Australia’s economy is to rebuild,” Mr Gannon said.
“The current negative gearing and capital gains tax arrangements are essential if the property industry is to continue to deliver jobs and growth.
“In South Australia, property is the state’s biggest industry, directly accounting for almost 11% of economic activity and providing jobs for almost 170,000 people.
“That’s why it’s welcome news that the Federal Government has confirmed there will be no changes to negative gearing or capital gains tax arrangements for property investments.
“In his budget speech, the Treasurer reiterated that removing or limiting negative gearing “would increase the tax burden on Australians just trying to invest and provide a future for their families."“And the focus on ‘mum and dad’ investors is right, with two million Australians owning an investment property. Of those people, 1.2 million Australians use negative gearing.
“Of those 1.2 million people, 840,000 Australians who negatively gear properties earn less than $80,000 per year. Negative gearing is the way that hundreds of thousands of average people secure their financial future.
“And to put our state into perspective, 130,000 South Australians own an investment property including almost 90,000 who use negative gearing. The top two suburbs where investors who use negative gearing live are Golden Grove and Woodcroft. Mount Gambier comes in at fourth place.
“That’s why this Budget decision is welcomed here in South Australia – it’s welcome news for 90,000 South Australians who own an investment property and use negative gearing.
“These people aren’t property barons or property tycoons – they’re ordinary people using property to secure their financial futures and help strengthen the economy.”