Rents to increase 10% with negative gearing change: report

THE Turnbull government attack on Labor's negative gearing policy could be bolstered by a report's claim that such changes would lift rents by at least 10%.

A report by BIS Shrapnel to be released today models the impact of one of key changes Labor has proposed - limiting negative gearing to new properties.

The Property Council of Australia has launched a campaign against changes to property tax breaks, but BIS Shrapnel declined to name who had commissioned the report.

Labor would remove negative gearing from established homes and cut the capital gains tax discount to 25%, from July 2017. BIS Shrapnel modelled the change from July this year, but with no change to CGT.

It found the impacts could include a 10% jump in average rent, a $1.65 billion fall in government revenue and a drop in construction of 7200 homes a year.

Despite not examining the impact of potentially billions of dollars in savings through a CGT discount, the BIS Shrapnel report said "in other words, the impact would go well beyond any saving of the income tax concession".

While Labor has relied on modelling from the left-leaning McKell Institute to back its policy, that modelling does not exactly mirror Labor's proposals.

Opposition Leader Bill Shorten again refused yesterday to say whether the party had fully modelled its proposed changes.

Prime Minister Malcolm Turnbull has not released any tax proposals ahead of the May budget and a potential double dissolution election, despite indicating he would at various times since becoming PM.

He told Question Time yesterday that Labor's proposal would not only reduce the value of properties up for sale, but "progressively" reduce the value of other housing.

Former Commonwealth Bank CEO David Murray says Labor's negative gearing plan may be good for the economy if it improves housing affordability.

Numerous economic experts have called for limits on negative gearing.

Topics:  housing property market rent renting

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Future of telecommunication

Kristy Sparrow from Better Internet for Rural, Regional and Remote Australia (BIRRR).

Survey allows rural Australians to voice their concerns.

Taking a national stand

NO WAY: Students from Year 8 created 'No Way' bullying posters to show bullying has no place at Emerald State High school.

Local high school raises awareness against bullying.

Inland Port announced

ECONOMIC BOOST: Federal Member for Flynn Ken O'Dowd makes the funding announcement at the Central Highlands Development Corporation's Economic Futures Forum on Monday.

Ken O'Dowd announced federal funding for two major projects.

Local Partners