Treasurer Joe Hockey has warned against tinkering with negative gearing, saying winding back tax breaks for property investors could result in massive rent hikes.
Mr Hockey on Thursday challenged Labor to provide a more detailed explanation about its position on negative gearing after shadow treasurer Chris Bowen raised the issue on Wednesday during an address at the National Press Club.
"If they've got a position on negative gearing, let them come out and explain what it is," Mr Hockey said in Sydney.
"A lot of Australians have invested their hard-earned money in real estate and, in doing so, they have offset the losses of that real estate against their primary income in order to give themselves and their children some financial security."
Mr Bowen on Wednesday said it would be "irresponsible to rule out going to the next election with changes to, for example, negative gearing".
Any changes would have to ensure that people who had made investments in good faith under current rules were not disadvantaged, and that there would not be a negative affect on the supply of new housing, Mr Bowen said.
Mr Hockey warned, however, that there are also "significant flow-on consequences" for people who rent homes that need to be properly considered.
"At the same time there is a very strong argument that if you were to abolish negative gearing, you would see a significant increase in rents. For a lot of people, a massive increase in rents is so unaffordable."
Prime Minister Tony Abbott last week ruled out any changes to negative gearing.
Share
