Friday, August 05, 2016

A $650 million subsidy to the rich

Negative gearing is a tax subsidy paid to landlords and property speculators. It cost us $650 million last year, and is a direct subsidy to the rich. Now, Labour is planning to get rid of it:

Labour has confirmed it will introduce a policy to remove tax breaks on investment properties but aims to target speculators rather than small-time landlords.

Labour's housing spokesman Phil Twyford has released Inland Revenue figures which showed property investors claimed $650 million in tax write-offs on residential rental properties in the year to March 2015.

His party now plans to crack down on negative gearing, which allows landlords to claim tax deductions on their rental properties.

And yet, despite that seemingly bold policy, they're also trying to hedge it, in an effort not to upset Boomer landlords. Which really makes you wonder if their heart is really in this. Negative gearing serves no good purpose at all. Instead, it encourages poor investment. We are better off eliminating it entirely. And if that upsets landed Boomers, fuck ' em.