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.”
The political commentary regarding retrospective changes to negative gearing is concerning, the head of tax at an international accounting firm has warned.