While I know it is hardly a new idea, to restrict negative gearing to the first sale only of properties built in the last 3 years could be the silver bullet to solve the Housing crisis and also help the government's budget position.
Negative gearing takes up a large amount of government revenue in tax forgone. And unfortunately, a lot of investors are buying old stock for investment, rather than putting money into new development to increase the stock and encourage construction etc.
By limiting negative gearing deductions to only new stock, the investment money will be being put into green fields development, thus reducing demand on existing stock and should hopefully free up this housing for owner occupiers.
To get it across the line, you would have to grandfather it in I feel..i.e make it only apply to new sales. If I already have an investment property, I should still be able to negative gear it.
Good idea/bad idea?
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