Dollars & Sense
Is the government gearing up for a housing change?
Sep 26, 2024
In a thought-provoking discussion, Greg Jericho, Chief Economist at the Australia Institute and popular columnist, dives into potential reforms of negative gearing and capital gains tax. He argues that these changes could enhance fairness in the housing market. The conversation also touches on misleading pricing tactics by major supermarkets and how these issues intertwine with broader economic concerns, including inflation rates and housing affordability. Jericho emphasizes the need to shift perceptions of housing from investment to necessity.
31:05
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Quick takeaways
- Reforming negative gearing and capital gains tax could create a fairer housing market, addressing affordability issues faced by ordinary Australians.
- Recent scrutiny of major supermarkets reveals manipulative pricing strategies, highlighting the need for stronger regulations to protect consumers.
Deep dives
Negative Gearing and Its Impact on Housing
Negative gearing allows property investors to reduce their taxable income by claiming losses on investment properties. This practice gained momentum after 1999 when the capital gains discount made it more appealing by allowing investors to keep half of their capital gains tax-free. Consequently, housing became primarily viewed as an investment opportunity rather than a place to live, resulting in skyrocketing property prices that outpaced household incomes. As investor interest surged, housing affordability became a severe issue, leading to calls for policy reforms to tackle this growing disparity.
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