Voters neatly split on changing housing rules

AUSTRALIANS are split three ways on Labor’s controversial policy to limit negative gearing and reduce capital gains tax reductions.

An exclusive YouGov Galaxy poll found 35 per cent want Opposition Leader Bill Shorten’s proposed changes, 34 per cent oppose them and 31 per cent don’t know.

Should Labor win the May federal election and the changes get through parliament, they will come into force from January 1.

Baby Boomers are more likely to oppose the changes (40 per cent) than Millenials (21 per cent). But males are more in favour of the changes (40 per cent) compared to 30 per cent of females.

Despite the differing views from the poll – held in late March before the Budget – experts believe the impact will be felt far and wide, including by real estate agents, investors, buyers, sellers and renters.

Real Estate Institute president Adrian Kelly attacked the mooted overhaul and said it was a vote-grabbing move.

“We’ve got a property market at the moment that is essentially experiencing a bit of free fall, particularly in Melbourne and Sydney, and finance has tightened up as a result of the Hayne commission,” he said.

“If you are going to introduce changes to taxation policy which has worked well for three decades then you probably shouldn’t be doing it in a falling market, you do it when the market is quite strong.”

In a report released this month by ratings agency Moody’s, house prices in major cities were forecast to fall by 7.7 per cent this year and apartments by 4.3 per cent.

Opposition treasury spokesman Chris Bowen was last week forced to backtrack on comments on the number of investors who buy new properties and negatively gear them.

He said only 7 per cent of property investors bought new homes, but the Grattan Institute said the figure was double this – 14 per cent of investors bought new properties rather than existing ones.

Under the existing negative gearing rules there are limited incentives to buy new builds.

This is why Mr Bowen wants the rules to be changed.

The Property Council of Australia’s Ken Morrison said it was a “precarious” time for the real estate industry because of falls in prices and slowed property construction and now was not the time to change policy.

“We are in a fragile phase of the property cycle,” he said.

“Further falls to property prices and construction activity are a risk to the economy, so there are significant warning bells.”

Mr Kelly said Labor’s policy would not make it easier for entry-level buyers to enter the market.