PHOTO: Reform to one housing tax is already in the spotlight. Photo: Peter Rae
In the post-COVID-19 pandemic economy, all options are on the table to get people back in jobs and build a better world, we’re told.
Reform to one housing tax is already in the spotlight (stamp duty) but what of the proposals to change negative gearing and capital gains tax that have been out of mind since the federal election?
This time a year ago, Labor appeared poised to win power and restrict tax incentives for negative gearing to new builds only, while grandfathering existing arrangements. Halving the capital gains tax discount was also policy, although the party later flagged a shift to a “new policy agenda”.
At the time, housing prices were falling in the wake of the bank regulator’s crackdown on interest-only loans and both buyers and sellers were hesitant to make decisions before the election result was clear.
After the election, a loosening of housing credit and cuts to interest rates, housing prices bounced before slowing more recently amid the health crisis – and it’s the direction of price moves that would be key in any future consideration of the reforms.
The Grattan Institute’s Brendan Coates last year called the policies “worthwhile reforms” that would generate substantial revenue for the budget.
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