NSW Planning Department wrong on capital gains tax call
The Property Council of Australia has today reminded all governments that better supply – not higher taxes on new housing – is the answer to housing affordability challenges.
The NSW Planning Department has recommended increasing Capital Gains Tax on investment properties in a submission to the important Federal Housing Affordability and Supply inquiry being chaired by Jason Falinksi MP.
Chief Executive Ken Morrison said proposals to increase Capital Gains Tax for housing investment flew in the face of evidence and would decrease supply when we needed it most.
“This NSW Planning Department submission is dead set wrong – increasing taxes on housing is not the answer to housing affordability,” said Mr Morrison.
“Housing affordability is a big challenge in many parts of the country, but this is not being driven by housing investors who are not a strong part of the current market.
“Increases to capital gains tax would reduce the incentive to invest at a time when NSW and the nation need to build additional and more diverse housing.
“In the same week the New South Wales Government has announced a significant economic recovery plan, it is disconcerting to read suggestions that the NSW Planning Department is asking another level of government to institute higher taxes on housing investment.
“These comments are an unfortunate distraction from the central duty of the NSW Planning Department. The Department needs to focus on filling the growing 54,000 home supply gap in New South Wales before international borders re-open and population growth resumes.
“We strongly encourage all governments to prioritise ways to increase much needed housing supply through the provision of properly zoned land, efficient approvals and strategic investment in infrastructure.”
Mr Morrison said the most comprehensive modelling of Federal Labor’s former policies undertaken by Deloitte Access Economics showed that increasing capital gains tax and abolishing negative gearing would damage the economy and cost jobs.
“Labor’s former policy would have caused a $766 million hit to construction, a $1.6 billion drop in GPD, cost jobs and make little difference to housing affordability. This is not the policy solutions Australia needs.
Media contact: Aidan Green | M 0491 030 028 | E [email protected]
Summary of Deloitte Access Economics’ analysis of ALP negative gearing and capital gains taxation policy
The Property Council of Australia commissioned Deloitte Access Economics to analyse the impact of the ALP’s negative gearing and capital gains policies that it took to the 2019 federal election and test them against the key assumptions underpinning the ALP’s policy.
This report models the ALP’s policies in full. It draws on detailed econometric modelling of Australia’s housing markets and the national economy for its findings.