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Budget, Scarecrows and the Investment Community
The way I see our Treasurer comments on land tax and stamp duty
By: Peter Carabot
This week we have seen the scarecrows come out of Canberra with the “rumour” about the imminent possible demise of Negative Gearing and the abolition of Stamp Duty……. stay put: replaced by an increase and widening of land tax and the imposition of a 4% levy (read Tax) on all investment properties!!
( Wasn’t something like this imposed and then scrapped in NSW o few years ago?)
I am quite sure that it’s only scaremongering by the Government, to prepare us for milder bad news on budget night. Nevertheless news like these, don’t infuse confidence on any investor or home buyer!!
In the past couple of weeks we have all seen the average figures for properties across Australia, they all have a common denominator:
It could be construed that the government is actively trying to force a downturn in the Real Estate Market,( Keep interest rates at bay?) if the Government is really serious about the mooted changes and therefore an increase in tax take from the property industry we will see a further shortage of rental properties and ultimately an increase in rents that will be borne by the people that least can afford it and contrary to the stated Labor aim of cheaper housing!!
Maybe it’s only me, every time that interest rates go up rents go up, wages go up, inflation goes up and we start again…. The same with taxes and charges, if the landlord cannot repay his/her mortgage because the government is taking more and more out of the pay packet and out of the investment, rents will go up! The changes that the Government is thinking of introducing, including the carbon tax, will be born entirely by the renters!!
It is pleasing to see that the industry is coming out in force to condemn such moves and has been urging the Federal Government, to retain the existing incentives for investors. Taxing the family home, talks of Death Duty, increases or a broadening in land tax are going to exacerbate the flight from property investment !!
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