Labor to end negative gearing concessions for new investors in the sector, which will allow more money to be spent on investment, including in housing.
The government is also proposing t?????o extend the tax benefit available to the first-home owner to seven years from three.
The bill would limit the amount of tax to be paid by second home buyers on investments in properties to 2% of their incomes over five years.
The government is also proposing to introduce an independent review of negative gearing by the end of this year.
Senator Wright said in the bill, he would support negative gearing being removed from the tax system and to be abolished for foreign investment for four years.
“The current system allows first home owners to make very substantial investment in the construction of home. That’s an important part of the country’s housing market.
“I’ve heard from a number of local groups and investors on what it is like to live in inner city areas where they can expect little or no benefit from the tax break.
“That’s what concerns me.
“We need to look at ways in which we can take a stronger line on housing investment, and it’s my hope that this legislation will help with that.
“It’s the best option we have right now.”
The government says the new legislation removes the “undue hardship” of many of the negative gea?????ring arrangements that were introduced by Labor, which led to some homes costing more than they otherwise would have.
It argues it is a more sustainable and fair system as there is no loss of wealth, and more homes are bought.
“As we move forward there will be fewer opportunities for the very wealthy to unfairly exploit the system that we already have,” he said.
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