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Negative Gearing – An Agent’s Perspective in an Election Campaign

April 12, 2019

It’s finally here …. the drive up Dunrossil Drive has occurred. New policies will be presented during the campaign – and the one I’m wanting to learn more about is the negative gearing platform of all parties.

I will stand corrected, but I can only find a Labor platform on this topic at the time of print.

Labor have a platform of closing the door on negative gearing on 31st December 2019 unless the investment is for new housing. (They could modify this of course during the campaign.)

In other words, if Labor wins the Election, any established property purchased from 1st January 2020 as an investment will not have the tax benefits of negative gearing unless it is new housing.

If this happens, those thinking of buying an established property as an investment in the next 2 or so years might decide to shift their plans to 2019; and/or buyers may decide not to upgrade their residence or new kitchen renovations until another year and buy an investment property instead. Naturally everything is subject to financial planning and tax guidance per person, but the closing off of negative gearing will get buyers (not wanting off-the-plan/new purchases) more focussed on what their dollars can secure before the door is closed.

Another scenario could be the off-the-plan / new market will receive a boost as being the only category of negatively geared possibilities post January 2020.

From an agent perspective for owners and buyers, this could mean an incredibly hectic 7 month window from June to December 2019 on established stock – in every market all around Australia, not just our region.

As a buyer, if you’re wanting to start or increase your negatively geared portfolio with an established purchase, we are going to see more buyers in the market – and potentially not enough stock to satisfy demand.

As a seller, if you’re thinking of selling sometime in the 2019/2020 financial year, and depending on what type of property you have, there is a chance your sale price prior to 31 December 2019 may be better than your 2020 sale price.

Stay tuned for commentary when the Liberal platform is announced.