Riverina MP Michael McCormack has joined a renewed campaign against the federal opposition’s plans for negative gearing on real estate, warning it would leave homeowners and renters worse off.
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However, Riverina Labor candidate Mark Jeffreson has labelled Mr McCormack’s predictions “questionable at best”.
Negative gearing allows people to use losses on property investments to reduce their taxable income.
Typically, a property is negatively geared when the money earned from rent is less than the owner’s interest repayments and other expenses.
According to public statistics from the Australian Tax Office, more than 2400 individual taxpayers in Wagga’s 2650 postcode claimed a rental loss on properties during 2015/16.
Labor has pledged to wind back the tax break scheme, arguing that Australia cannot afford to “subsidise” property investors and claiming negative gearing will result in forgone tax revenue of $8.6 billion in 2018/19.
Mr McCormack described Labor’s policy as an “ill-conceived property tax”.
“There are more than 5500 people in the Riverina and Central West who negatively gear their property and stand to lose if Labor has its way,” Mr McCormack said.
“This property tax announced by Labor will mean if you own your own home it will drop in value and if you rent you will be paying more.”
“Labor does not care about the mum-and-dad investors in rural and regional Australia who have put their savings into bricks and mortar as a nest egg for their retirement.”
Mr Jeffreson denied there would be a major impact on Riverina homeowners and renters.
“The existing arrangements people have will be grandfathered. Negative hearing will still be available for new dwellings,” Mr Jeffreson said.
“Labor is prosecuting this reform to allow for a fairer, more equitable taxation system.
“There are no independent reviews that confirm any significant change to prices and rents. Michael's position is only supported by modeling that is questionable at best. Independent modeling suggests only a minor impact on prices or rent.”
Mr Jeffreson said the 5500 Riverina and Central West property owners mentioned by Mr McCormack could continue negative gearing “due to the grandfathering of existing arrangements”.
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