Treasurer Josh Frydenberg has ruled out any changes to the negative gearing regime, but Liberal MP John Alexander has called for restrictions on the tax-deductibility of investment properties. He argues that an “economic lever” is needed to address the growing dominance of investors in the housing market, given the low interest rate environment. Alexander has suggested imposing a percentage limit on tax deductions for investment in new housing, which would be adjusted in accordance with changes in the property market:
“Politicians have unforgivably played politics with housing for too long,” he has written in a new policy paper.
“Alarming evidence from the parliamentary inquiry I recently initiated and chaired was that low interest rates empowered investors to dominate the housing market to the exclusion of first home buyers, resulting in what was termed ‘investor-driven housing inflation’”…
