Massive tax handouts for property investors

MP Max Chandler-Mather Member for Griffith mentions "Massive tax handouts for property investors" in his ABC Insiders interview with David Speers in response to the 'Help to Buy' scheme proposed by Anthony Albanese before the election. The aim of this policy is to help those who otherwise can't afford to buy a home.

So in this article we discuss -:

1. Is Negative Gearing and other tax incentives distorting the rental market?

2. How can a country the size of Australia have issues with density? Surely it's poor planning over a number of years.

Is Negative Gearing and other tax incentives distorting the rental market?

Negative gearing is a tax policy in Australia that allows property investors to offset their rental property losses against their taxable income, reducing the amount of income tax they need to pay.

History of Property Gearing in Australia

"Grattan Institute report on impacts of phasing out negative gearing said there would be no impact on rents"
Max Chandler-Mather

"And I think a lot of people out there agree that we're better off spending billions of dollars building public housing than giving tax handouts to people with 5 10 20 investment properties. That means it's easier for someone to buy their 10th investment property and harder for someone to buy their first."
Max Chandler-Mather

Joe Hildebrand's response a barrage of personal criticisms-:

• "the turd is on your shoe before you even step on it"
• "But this seems beyond the ken of Mr Chandler-Mather (why do they all have hyphenated surnames?)"
• "But on the off chance that Mr Chandler-Mather and the multiple-property-owning Greens Treasury spokesman Nick McKim aren't the economic geniuses they think they are.."
• "the Greens and their NIMBY mates oppose it. Indeed, Mr Chandler-Mather has opposed the construction of 1300 new homes in his own Brisbane electorate."
• "Meanwhile, back on Insiders, Mr Chandler-Mather took issue with the fact that new housing was built by developers who want a profit."
• "Presumably the Greens want properties developed by non developers and then sold at a loss."
• "And what does a sustainable and well-planned rezoning proposal look like?"
• "Oh, of course they're not opposed to property development, just property development by property developers."
• "Of course their not opposed to higher density, just higher density in their suburb."
• "And so people go homeless, renters struggle to make ends meet and young people are locked out of the property market because the Greens want to harangue people with juvenile socialist dogma about 'profits' while blocking practical proposals."

MP Max Chandler-Mather on Insiders-:

"Look property developers as long as they're in charge of supply and housing will only ever supply housing at a rate that generates them a profit and sees house prices continue to go up. We know this because over the last 20 years, basically property developers have got whatever they want. Now we want to deal with this issue then the government should start building public housing at a scale that they used to in the 20th century. It used to be 30%. At some points of all construction was of good public housing for workers."
Max Chandler-Mather

"And of course, with the Greens recognize we can't get everything we want. And if we have to negotiate with the government to get through the little scheme that will have an inflationary impact [Help to Buy Scheme] on house prices, but on the other hand, we can get the through changes to capital gains, tax concessions and negative gearing, but overall, that would be a good thing."
Max Chandler-Mather

"There'll be a broad net positive if we can negotiate a phase out on tax handouts for property investors, get a cap on rent increases and build public housing taken as a whole."
Max Chandler-Mather

Help to Buy Scheme

"the government scheme would only help point 0.2% of renters buy a home every year and nothing for the other 99.8% in this country"
Max Chandler-Mather

The scheme is limited to 10,000 lower income earners a year over four years. So 40,000 places in total.

The government would take a 30% stake in a property being purchased or 40% if it is a new build, which means buyers then don't have to stump up quite such a big deposit. And when the property is eventually sold taxpayers would be repaid including any depreciation on the investment.

Poor Planning - Density

There are country towns struggling to survive and cities with ever increasing density in Australia.

We have had a number of mining booms and still enjoy some competitive advantages. Energy no longer needs to be from one specific networked source. It is feasible for a whole town to go off-grid and derive energy from solar, wind and other renewable sources.

Water is an issue, however there is also desalination as an option. Why aren't strategic townships built using the technology available in 2024? We still sell coal. We spend billions on defence.

Why not build an affordable decentralised liveable lifestyle oriented estate in Australia?

References and Sources

ABC Insiders 18th Feb 2024 - David Speers Interview with Greens MP Max Chandler-Mather Member for Griffith.

A Brief history of Property Gearing in Australia - https://www.capitl.com.au/a-brief-history-of-property-gearing-in-australia

Gold Coast Bulletin 21st Feb 2024 It's easy to see red over Green's plan for housing Joe Hildebrand