Media Release – The Real Cost of Negative Gearing

MEDIA RELEASE

12 April 2017

 The Real Cost of Negative Gearing

A new report released today by Sydney Author and Chartered Accountant Wayne Wanders shows that the real cost of Negative Gearing by “mum and dad” property investors is significantly less than other benefits provided by the Federal Government.

Mr Wanders said that the impact on the Federal Government’s budget of nearly 1.3 million individual “mum and dad” taxpayers who had negatively geared properties in the 2014- 2015 tax year was $1.6 billion dollars.

“This is substantially lower than the $5.0 billion dollar cost to the Federal Government’s budget of the 8.6 million taxpayers who claimed nearly $21.9 billion dollars in work related expenses in the 2014-2015 tax year” said Mr Wanders.

“And this is also significantly lower than spending in the 2015-2016 year on welfare items like the $7.4 billion dollars spent on the Child Care Rebate; the $20.9 billion dollars spent on the Family Tax Benefit; the $2.0 billion dollars spent on Parental Leave or the $6.2 billion dollar Private Health Care Rebate.”

“And this pails into insignificance when you realise that the Federal Government in 2014-2015 pocketed nearly an extra $5.5 billion dollars in income tax from individual taxpayers through bracket creep.”

Mr Wanders was able to use the Australian Tax Office’s own data from its recent release of the 2014-2015 Taxation Statistics, to determine in excess of $9.0 billion dollars of economic benefit to the Australian economy from these nearly 1.3 million individual “mum and dad” taxpayers.

“So for every dollar the Federal Government “assists” these taxpayers, they contribute over five dollars to the Australian economy.”

“All of which leads to the conclusion, that the 1.277 individual “mum and dad” taxpayers who negatively gear investment properties, are not costing the Australian economy and in fact are significantly contributing.”

Click on the button below to read the full report.

Do you and your family a favour and start taking steps so you can avoid the poverty trap.

Wayne Wanders

The Wealth Navigator

wayne@thewealthnavigator.com.au