Bell rings gear­ing fears

Real es­tate king, Ciobo pan Fed­eral La­bor’s plan

The Gold Coast Bulletin - - NEWS - ALIS­TER THOM­SON alis­ter.thom­son@news.com.au

RENTS could rise to “ex­or­bi­tant” lev­els if La­bor im­ple­ments its plan to limit nega­tive gear­ing for new prop­er­ties, a lead­ing Gold Coast prop­erty fig­ure says.

La­bor, if it wins the fed­eral elec­tion next year, plans to limit tax breaks to new hous­ing in­vest­ment and halve the cap­i­tal gains tax de­duc­tion avail­able on in­vest­ment as­set sales.

The nega­tive gear­ing pol­icy would only ap­ply to se­cond- hand prop­erty pur­chases, and would not be ret­ro­spec­tive, mean­ing peo­ple who cur­rently use nega­tive gear­ing would not be af­fected.

An­drew Bell, who heads up Ray White Surfers Par­adise Group, the city’s largest real es­tate agency, said for­mer prime min­is­ter Bob Hawke’s stop to nega­tive gear­ing in the 1980s had a se­vere ef­fect on the rental mar­ket.

“I’d be one of the few peo­ple who were around the last time La­bor did this in the 1980s, and it proved to be a dis­as­ter then,” Mr Bell said. “Largely be­cause the knock-on ef­fect was it stopped in­vestors buy­ing in­vest­ment prop­er­ties, which re­sulted in a dra­matic re­duc­tion in the rental pool which caused rents to go up ex­or­bi­tantly and caused all sorts of pres­sure for peo­ple who could not find rental prop­er­ties.”

Mr Bell said many vis­i­tors bought units and houses on the Gold Coast as a hol­i­day prop­erty to rent out for part of the year when they were away.

“Those peo­ple, who would have needed nega­tive gear­ing to make that propo­si­tion work, will not buy in­vest­ment prop­er­ties which will take a lot out of the rental pool.”

Rental rises will not be rel­ished by city ten­ants. The va­cancy rate ear­lier this year stood at just 1.1 per cent and me­dian weekly rental rates are $499.

Mon­crieff MP Steven Ciobo slammed La­bor’s plan, claim­ing it would pun­ish those who used nega­tive gear­ing and any­one with eq­uity in their home.

“The Gold Coast con­struc­tion in­dus­try is a ma­jor lo­cal em­ployer and La­bor’s pol­icy puts these jobs at risk,” he said.

“Many of the high-rises that are built and main­tained on the Coast are pur­chased by in­vestors. La­bor is tak­ing a sledge­ham­mer to these peo­ple.”

Mr Ciobo said peo­ple who used nega­tive gear­ing were not rich but or­di­nary work­ers such as teach­ers, po­lice and emer­gency ser­vices work­ers.

“Now is the worst pos­si­ble time for La­bor to push its prop­erty tax,” Mr Ciobo said. “Aus­tralia’s hous­ing mar­ket has been cool­ing for 12 con­sec­u­tive months in our cap­i­tal cities. A grow­ing num­ber of ex­perts have also been warn­ing La­bor’s poli­cies will have a sig­nif­i­cant nega­tive im­pact on the econ­omy and the prop­erty mar­ket.

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