What does the election result mean for property owners?
As there will be no changes to negative gearing as a result of the Australian Federal Election of the Coalition Government, home owners and investors can now take a collective sigh of relief.
Labor’s policy meant a negative gearing ban, leading to a drop in demand for property, since property investors make approximately 1/3 of housing finance commitments. This would have seen house prices decrease, and rents rise.
What is negative gearing and how can it affect you?
Negative gearing occurs when the cost of owning a rental property outweighs the income it generates each year. This allows property investors who make a loss, to reduce the tax they pay on other income.
According to the Australian Bureau of Statistics, 93 per cent of home-loans in Australia lean towards existing properties. Labor says by restricting negative gearing to brand new properties, it will drive investors to build more housing stock and reduce competition amongst existing housing.
If you're an investor trying to reduce the amount of tax you pay, then investing in new housing will be your only option to access negative gearing.
Australia has one of the highest home ownership rates in the world. The Turnbull Government wants people who aspire to own their own home, to be able to fulfil that aspiration, enabling them to settle into a community and provide stability for themselves and their family.
At Main Beach Property Sales, we are dedicated to building trust with our Clients, be they Sellers / Investors / Buyers or Renters. We can now safely continue this trust within this positive environment in the workplace and the community.
To new beginnings!
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