According to a new analysis by the Property Investors Council of Australia (PICA), an average father and mother investor adds hundreds of thousands of dollars to public wealth during the life of a single investment property.
"The amount of federal taxes that real estate investors pay is extraordinary and will surprise many – and that is before the stamp duties and property taxes established by the state are included, adding tens of thousands of dollars more to the bill, "said Ben, chairman of PICA Kingsley" It is clear that real estate investors are paying well beyond their fair share of taxes, and we are concerned that their taxation on investors may collapse further if Labor Party policies emerge. "
PICA has modeled its investor tax figures on the basis of current rules of negative capital gains and debt (CGT) tax, assuming that assets were held for a standard 30-year loan term.
The results showed that even though a typical Australian investor will initially benefit from a negative gear, he will be taxed close to $ 167,000 in subsequent years, over the 30 years of modeling.
Following the current of thought, their net tax on rental income during the term of the investment will reach more than $ 138,000 under the current negative conversion rules, according to Kingsley.
"The initial tax benefit in this scenario is about $ 30,000, before paying the $ 167,000 on the way," he said. "If you think about what first home buyers earn in grants, stamp grants, etc., this sounds a lot like what investors receive, but investors have to pay a lot more tax when homeowners do not pay. nothing more."
Kingsley stated that under the rules in force, the CGT also made a substantial contribution to the government's tax bill.
"Our data showed, for example, that if the average investor couple sold their assets within 30 years, under the current 50% exemption rule, they would pay more than $ 611,000 in CGT, "he said.
Real estate investors are not "the big end of the city"
The majority of 2.2 million real estate investors in the country earn less than $ 80,000 a year. As a result, Labor's claim that tax loopholes in the most disadvantaged neighborhoods are "insulting," according to Kingsley.
"It is utterly misleading to call homeowners the" big end of the city "before election day," he said.
Kingsley said investors had been unfairly targeted throughout the election campaigns of Labor and Greens.
"Parents are tired of calling themselves" gluttonous real estate investors who buy their fifth or sixth property, "while nearly 72 percent own one," he said. "We also have enough to be blamed for the rise in real estate prices, while historically, investors accounted for only three out of ten buyers in the market."
According to the PICA, the analysis showed that investors already contributed a lot to the financing of essential services through taxes.
Increasing the taxation of investors wishing to self-finance their retirement would have significant economic consequences for all Australians, said Kingsley.
"We agree with the research undertaken by the Property Council of Australia regarding Labor's policy on negative gearing and CGT – that it will force the average investor to exit of the property, which will reduce the demand and get a [negative]. impact on prices, "he said. "In addition, policies will also reduce construction over time, forcing rents to rise as the rental supply becomes tighter."
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