Research Papers

What Politicians Need To Know About Negative Gearing

Written by
20 February 2016

• Low and middle income earners benefit most from negative gearing. To abolish negative gearing would make investment more difficult for low and middle income earners.

• 80 per cent of Australians who utilise negative gearing have an income of under $150,000, and the median income of Australians negatively geared is $88,751.

• Changing negative gearing will make it more difficult for these Australians to provide for themselves in retirement.

• Negative gearing is not distorting the Australian taxation system – it reflects efforts to make the tax system neutral across asset classes.

• The Labor Party’s proposal would result in barriers to entry for those who would be forced to buy new expensive housing stock instead of potentially cheaper existing housing stock.

• The Coalition’s policy to reduce “excessive” negative gearing is contrary to their philosophy of encouraging investment and entrepreneurial growth.

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Sinclair Davidson is an Adjunct Fellow at the Institute of Public Affairs

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