Negative gearing changes could save us $5.3 billion
Changes to negative gearing are long overdue, and could save the budget bottom line $5.3 billion according to a new report by the Grattan Institute. The report says that together with capital gains tax discounts, negative gearing is contributing to volatility in the housing market. The news came as Delloitte Access Economics released their pre-budget analysis, predicting another $129 billion in budget deficits over the next four years. The Grattan Institute has recommended that the capital gains tax discount should be reduced from 50 to 25 per cent, but Prime Minister Malcolm Turnbull has rejected the Institutes claim. He says that removing negative gearing “would mean a tax increase for wage and salary earners and would affect incentives to work”.