Home rental affordability is a key election issue and so Opposition Labor would retainnegative gearing as a way to make housing more affordable, according housing spokeswoman Tanya Plibersek said.
Ahead of the party's national housing summit in Canberra this week, the Opposition was looking at several strategies but, Ms Plibersek said, negative gearing would not be among them.
"We're not touching negative gearing," she told the Ten Network yesterday. "We are interested in . . . ways of attracting investment into the lower end of the market and there might be things you can do with the tax system to improve that, including a national affordable rental incentive scheme."
"Negative gearing" means that the outflow of cash to keep an investment, such as a rental property is greater than the the inflows of rent and taxation reduction. This means that the investor is effectively subsidising the housing of the tenant. The payoff for the investor is capital growth, which needs a long term view.
In these cases, the Australian Taxation Office allows investors to offset the loss against their income tax assessment.
Ms Plibersek said negative gearing was not the way to make housing more affordable. Labor would look at other solutions.
She said Labor also retain the first home buyers grant.
