Federal election 2016: Negative blow for Sydney investors under Labor plan

EXCLUSIVE: Western Sydney property investors would be among the hardest hit by Labor’s plan to scrap negative gearing and reduce capital gains discounts, according to a new analysis.

Jetlee and his wife Mikaila and Olive, 2. They have two investment properties which are negatively geared. Picture: Adam Taylor

WESTERN Sydney property investors would be among the hardest hit by Labor’s plan to scrap negative gearing and reduce capital gains discounts, according to a new analysis showing the proposals could cost individuals up to $35,000.

Labor plans to axe negative gearing on existing properties bought after July 1, 2017, leaving investors in newly-­constructed homes the only buyers able to claim the tax write-off. Current investments would not be affected.

It also plans to halve the CGT discount introduced by the Howard government, forcing a heavier tax burden on investors selling for a profit.

Opposition Leader Bill Shorten claims the measures will save the budget $32 billion over 10 years.

But analysis by the Property Council claims investment property buyers in Sydney’s west would be hit harder than those in other locations.

“Our analysis for a typical property in Toongabbie shows that a taxpayer could pay a total of $184,000 in taxes over a six-year period, including an additional $35,600 in new taxes,” PC chief Ken Morrison said.

“A property owner in St Marys will pay $23,000 in additional taxes. This compares with $13,700 in Bateau Bay, $17,700 for The Entrance and $8100 in Armidale.”

The warning comes as new tax office figures reveal how crucial Labor’s policy may be to the outcome of the election on Saturday, with new figures showing how many investors operate in key marginal seats in Sydney’s west.

There are 13,020 investment property owners in Greenway, which is held by Labor’s Michelle Rowland with a slim 3 per cent margin, according to the ATO. Just over 9000 of them negatively gear their properties.

There are 14,686 property investors in the electorate of Parramatta, held by Labor’s Julie Owens by a wafer-thin 1.3 per cent margin. Just over 6220 of them negatively gear.

Shadow Treasurer Chris Bowen (pictured) defended Labor’s policy, saying: “All those with existing properties in Western Sydney have their investments fully protected — Labor’s reforms to negative do not apply to them.”

Shadow Treasurer Chris Bowen. Picture: Tara Croser.