Gov’t spends on fuelling housing crisis rather than fixing it |
The Australian government spent billions more on tax breaks for property investors last year than it did on social housing, homelessness services and rent assistance combined, research by the Australian Council of Social Service (ACOSS) has found.
“This report shows housing stress and homelessness are getting worse while absurdly generous tax breaks drive up home prices and supercharge inequality in our society,” ACOSS acting CEO Jacqueline Phillips said on January 30.
ACOSS reports that tax breaks for investors, such as the capital gains tax (CGT) discount and negative gearing, cost a whopping $12.3 billion last year. Almost 60% of the benefits of these tax breaks go to the richest 10% of people.
Negative gearing allows investors to use the cost of maintaining their empty properties as a tax write-off, even if the property is increasing in value.
Investors can hold onto these empty properties — creating an artificial housing shortage — knowing that when they decide to sell, they will receive a 50% CGT discount. Or, in the other win-win situation for landlords, they can rent out their properties, taking advantage of landowner-friendly........