Exploding Myths and Misconceptions About Negative Gearing

Video Comment from Dan White, Director, Ray White Group

The debate around negative gearing — and changes the ALP proposes to make to it should it win office on 2 July — is prejudiced, in part, by common myths and misconceptions about what negative gearing actually is, what tax treatment these arrangements currently attract, whether or not the government is “paying” investors, and exactly what arrangements will apply if the policy proposal from the Labor Party is ever legislated in its present form.

Today, Ray White Group Director Dan White explains simply and clearly exactly what is entailed in the present system of negative gearing, and why much of the rhetoric put forward to justify wholesale changes to this system at best involves a high degree of misunderstanding and at worst, is simply incorrect.

Contrary to the storm of outrage that some voices in the debate seek to whip up over negative gearing, this is NOT a junket enjoyed by “the rich:” it is a legitimate tax deduction open to ALL Australians.

Three-quarters of those who use negative gearing because it’s the only way they can afford to invest in property — and to get ahead a little and build for the future of their families — earn less than $80,000 per annum, and can hardly be described as “rich.”

And in fact, as Mr White explains, Labor’s policy will only make it easier for wealthier investors who can afford to carry losses forward on property investments to dominate the property market: making a complete mockery of the policy’s stated objective of greater affordability for people on modest incomes, which in turn will only hurt the first home buyers and other supposed beneficiaries the ALP claims it wants to help.

We encourage everyone following this debate to take a few minutes with Dan White as he gets to the heart of these matters in his video comment today.