While the Labor party made clear their plans for negative gearing, the Coalition’s had been shrouded in speculation, with many believing they were leaning towards a cap on the dollar amount that could be claimed each year through negative gearing.
It was then reported that a party room revolt would see the plans killed off, but Antony Bucello, Victorian state manager for National Property Buyers, believes the government may have been simply testing the electorate’s appetite for change.
“I think sometimes that politicians put things out there in order to gauge response and market sentiment and what the general public think of the issue,” Bucello said.
“I think that probably largely came about because the GST is probably going to remain the same and they were perhaps toying with other areas where they could potentially save some money,” he said.
While lobby groups and people within the property investment sector were quick to raise concerns when Labor announced their plans, Bucello had a more pragmatic outlook on the issue and still doesn’t believe changes to negative gearing would be a nail in the coffin for the industry.
“I don’t think it (changes to negative gearing) would have an enormous impact on the market,” he said.
“It looks as though everything’s going to remain the status quo. I tend to think that’s fine, but it wouldn’t worry me if it changed either because from what I understand, under what was being proposed, existing negatively geared properties would remain, so a lot of people would still be fine and there are a lot of people out there who invest in positively geared property so it doesn’t affect them.”
While he is fine with negative gearing remaining as is, Bucello believes the wave of criticism directed towards the idea is a repeat of what happened when many predicting investor lending changes announced by APRA would be the death knell for property investing.
“When the APRA decision was announced and there were changes to lending and criteria around that, we did see a drop off in enquiry level from investors; however it was only temporary.
“It was just like a little bit of a correction, but then people realised it’s (the property market) still pretty good anyway and providing you buy the right property, it’s still a positive thing to do even after the lending rules changed a bit.
“All of sudden people would probably stop and wait and we might go three months or there abouts and then people realise not a lot has changed and the market’s still pretty buoyant.”
As it appears increasingly likely that the Turnbull government will not include changes to negative gearing in its tax reform package, one property expert has questioned whether the Coalition ever had serious intentions of tinkering with the tax break.