The political commentary regarding retrospective changes to negative gearing is concerning, the head of tax at an international accounting firm has warned.
BDO tax partner Eddie Chung says wind back negative gearing benefits on a retrospective basis penalises hard-working Australians for being financially responsible.
“People make medium to long term economic decisions based on the law at the time, and while some may argue the environment has changed to warrant the wind back of negative gearing benefits, doing so retrospectively and applying it to people who have already bought properties on which negative gearing benefits are claimed would be tantamount to penalising them for planning ahead and being financial responsible,” Chung said.
“These people should not be penalised for choosing an option that would make themselves financially self-sufficient, rather than having to rely on the Government for assistance when they retire.”
In fact, Chung claims it is “blatantly inequitable” and could destabilise the economy.
“It could undermine the stability of the economic environment, which may have a far reaching impact on market confidence and therefore the stability of the economy.
“It is akin to telling people who have been saving for years through their superannuation funds the environment has now changed and the Government will seize all superannuation benefits to balance the budget.
“You simply don’t tinker with people’s medium to long term plans because these plans need political and economic certainty to achieve their intended outcome, which underwrites the economic future of this country.
“Even if negative gearing changes are to be entertained, allowing these changes to apply retrospectively must not be an option.”
Retrospective negative gearing changes ‘blatantly inequitable’ . 2016. Retrospective negative gearing changes ‘blatantly inequitable’ . [ONLINE] Available at: https://www.brokernews.com.au/news/breaking-news/retrospective-negative-gearing-changes-blatantly-inequitable-212521.aspx. [Accessed 29 February 2016].
The property market is still alive and well, the results of a new report by a non-major lender has revealed.
ME’s latest Property Buying Intentions Report indicates demand for residential property may remain strong over the next 12 months despite prudential changes and tightening of lending criteria for some home buyers.
The report shows a big jump in demand for property by owner occupiers potentially offsetting falling demand by investors, while buyers continue to outnumber sellers.
According to the Report, among those actively looking to buy property in 2016 in the six months to December 2015, there was a 5 point increase to 50% in the proportion looking to buy a home to live in. This offset a 5 point fall to 33% in the proportion looking to buy an investment property over the same period.
The report also revealed that buyers continue to outnumber sellers by more than two-to-one.
ME treasurer, John Caelli, said these findings indicate property demand pressures from buyers are likely to remain strong over the next 12 months.
“While recent tightening in bank prudential regulations and lending criteria have reduced the proportion of investor buyers, overall demand for property may remain strong due to increased demand by owner occupier buyers,” he said.
“Demand expectations from buyers may also remain strong due to unmet demand from owner occupiers supported by continued low borrowing costs and recent improvements in the labour market.”
The report also found that 25% of Gen Y intends to buy an owner occupied property in the next 12 months, the most of any age group. Similarly, 8% of Gen X intends to buy an investment property in the next 12 months, the most of any age group.
“Demand for property still strong, says report . 2016. Demand for property still strong, says report . [ONLINE] Available at: https://www.brokernews.com.au/news/breaking-news/demand-for-property-still-strong-says-report-211010.aspx. [Accessed 26 January 2016].”
Investment lending has suffered the largest fall in seven years, news figures reveal, as the regulator crackdown hits the market in full swing. According to the latest housing finance figures released by the Australian Bureau of Statistics (ABS), the value of investment lending tumbled 8.5% in September. The total value of housing finance commitments dropped 1.6% over the month, buoyed by a 3% rise in finance for owner-occupied home loans. In total, investment loans made up approximately 36.9% of all loans written over September, down from 39.4% in August and 41.4% in July.
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The Reserve Bank has left the official cash rate on hold at 2% for the fifth consecutive month at its October monetary policy board meeting.
Mortgage Choice CEO John Flavell isn’t ruling out future cash rate cuts.
“Of course, today’s decision doesn’t mean we have necessarily seen the last of the rate cuts. What happens both locally and abroad over the next few months will determine the future actions of the Reserve Bank. If consumer sentiment, business confidence and economic growth perform sluggishly, we may see the Reserve Bank cut rates again,” he said.
by Julia Corderoy | 31 Aug 2015
The cash rate is tipped to remain on hold at its record low when the Reserve Bank meets tomorrow. However, the housing market isn’t likely to receive any spring time surge.
All but one economist in finder.com.au’s monthly Reserve Bank survey expect the cash rate to remain on hold at 2% as we enter the first month of spring, as the central bank continues to assess the impact of the latest two rate cuts in February and May. The one remaining respondent expects the market will see a cash rate drop.
But despite the cash rate being tipped to remain on hold at its historical low, the majority of the economists and analysts surveyed don’t think it is likely to affect the housing market and cause a spring time surge in home sales.
Just under 60% expect auction clearance rates to remain stable at its current level, while more than one in three experts (34%) expect auction clearance rates will drop.
Looking ahead, almost eight in ten (78%) expect that the cash rate will remain on hold for the remainder of 2015, while 5% say the Reserve Bank is still likely to drop the cash rate.
Looking even further ahead and more than half (56%) believe that 2016 will be the year the cash rate will begin to rise, with the fourth quarter of the year the most likely period for this to happen.
Thirty-two economists and analysts participated in this month’s finder.com.au Reserve Bank survey.
Cash rate unlikely to be dropped . 2015. Cash rate unlikely to be dropped . [ONLINE] Available at: https://www.brokernews.com.au/news/breaking-news/cash-rate-unlikely-to-be-dropped-204879.aspx. [Accessed 30 August 2015].
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*Interest rate is current as at 15-April-2015 and is subject to change. #Comparison Rate based on a loan of $150,000 for a term of 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Credit criteria, conditions, fees and charges apply. Members Equity Bank Limited ABN 56 070 887 679 AFSL and Australian Credit Licence number 229500.