I can’t quite believe what I am reading, but here it is from the SMH:
The Gillard government has sounded out unions over steps to cool Australia’s housing market, with measures that range from a new sales tax for investors sitting on large property portfolios, to curbing the popular strategy of using negative gearing for multiple properties.
Senior federal Labor figures and key union backers are believed to have discussed the plan as a way to tackle housing affordability. Details of the proposals, which would apply to home owners with two or more investment properties, have not yet been developed. The talks come before a tax summit planned for later this year.
A spokesman for Treasurer Wayne Swan declined to comment. The Age believes no plans are in place for the coming federal budget.
If implemented, the moves would mark some of the biggest changes to property tax in nearly two decades, particularly in tackling the politically thorny issue of negative gearing, which provides billions of dollars of tax breaks to millions of Australians.
But to reduce political risk, the changes have been designed to target only the wealthiest property owners, leaving those with one investment property untouched.
One change believed to have been discussed is for owners of multiple investment properties to pay a levy of 4 per cent of sale price at the time of sale, on top of state-based taxes.
Another proposal is to scale back the negative gearing tax benefit from its 100 per cent benefit as the number of investment properties rise.
The proposals came as Mr Swan yesterday warned of a difficult budget against the backdrop of natural disasters and softer near-term economic conditions. He cautioned a return to boom conditions would stretch the economy’s capacity over coming years, but without the revenue surge.
Pure speculation, more “softening up” or a real plan? Maybe this is a deliberate leak to gauge the backlash? Who knows?
But if true, it certainly flies in the face of those who expect the government to step in to save the housing market yet again. As I discussed yesterday I see little evidence that the government is looking to implement some new form of housing stimulus. This reads to me like an attempt at a slow deflation. A courageous decision.