Treasurer Scott Morrison used yesterday’s mid-year Budget update to renew the the Coalition’s attack on Labor’s negative gearing and capital gains tax (CGT) policy.
Morrison claimed that growth in Sydney house prices had eased from 15% to 5% in six months after just a small change to mortgage loan rules, and that if only a small change to borrowing rules led to a significant easing in house prices, voters should ask themselves what might happen if Labor won the next election and made changes to negative gearing and CGT. From The AFR:
…under a Labor government, which would alter negative gearing and the capital gains tax discount, house prices would fall too much, he said.
“With the slightest change to interest-only lending we’ve seen Sydney house prices fall from double digits, from 15 per cent growth, to 5 per cent in six months,” Mr Morrison said.
“That’s with the slightest, scalpel-like change to macroeconomics of housing borrowing. Can you imagine if Labor removed negative gearing and took the hammer to those tax [settings]?”…
Mr Morrison said it was important to get the balance right.
“You’ll be very aware of the measures we took early in the year with APRA, which has had the desired effect of cooling the more enthusiastic elements of the market on the investor side, particularly in Sydney and Melbourne,” he said.
Rather than respond to Morrison with words, this is an opportune time to release MB’s latest primer video on negative gearing:
