ATO ordered to ensure new negative gearing laws protect investors in dud properties

The federal government has moved to ease the fears of investors with apartments in Opal and Mascot towers, assuring them that they will still be able to negatively gear their properties.

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Mum and dad investors who own an abandoned apartment in Opal or Mascot towers will still be able to negatively gear their dud properties, the federal government says.

The government has ordered Treasury and the Australian Taxation Office to clarify proposed laws to ensure they would not affect owners of unsafe residential towers.

Stranded students and their pet cat were evacuated from their Mascot Towers unit in June. Picture: Monique Harmer

In July, the government introduced legislation to parliament that would stop deductions for holding expenses on vacant land to tackle improper claiming — a move estimated to save $30 million over three years.

But, as revealed by The Daily Telegraph, experts were concerned the changes could apply to owners of apartments in defective buildings that could not be lawfully occupied.

The government said the concerns were unfounded.

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The Coalition-chaired Senate Economics Legislation Committee disagreed in an official report into the bill published yesterday.

“The committee calls on Treasury and the ATO to address any unintended consequences for property owners where the property is unusable for reasons outside their control,” the report said.

Investors with units in Opal (left) and Mascot (right) towers will still be able to negatively gear their properties.

The report referenced The Telegraph’s coverage of the potential implications for Opal and Mascot owners.

In response to the committee’s report, Housing Minister Michael Sukkar told The Telegraph that “to put the matter beyond doubt and to provide certainty to property owners, the government has instructed Treasury and the ATO to ensure the bill makes it abundantly clear that these measures do not extend to taxpayers whose property is not available for use as a result of unforeseen and uncontrollable events, including due to building defects.”