Regardless of who wins the federal election this year it looks like there will be changes to Australia’s negative gearing regime which allows investors to write off the costs of income-producing investment assets.
The Turnbull government hasn’t announced a policy yet but treasurer Scott Morrison has signalled he’s willing to review “excessive” use of the regime, especially by wealthier investors. Labor, however, is proposing limiting negative gearing only to new homes, with the aim being to stoke the supply of new housing stock.
Zaki Ameer is one of the people concerned about the impact Labor’s plan might have. The AFR reports today:
“It would be a shock to the economy. It would shock investors, which could turn into panic and cause the housing bubble to burst,” Mr Ameer told The Australian Financial Review.
All of Mr Ameer’s investment are in existing properties, as are those he advises his clients to purchase. He said changes to negative gearing would hit property values and also affect the wider economy.
“Investors buy properties in rundown areas and improve them. This creates construction jobs and rental accommodation. The Labor plans would really scare people. My clients would be freaking out,” he said.
Ameer runs a wealth-creation mentoring business, Dream Design Property. And he has 15 negatively geared properties in Sydney and Brisbane.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.