Property agents unite to fight negative gearing crackdown

Real estate agents declare war on Labor’s negative gearing plan and will mount a four-week campaign.

Chris Bowen delivers his budget reply address at National Press Club this week.

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Real estate agents across the ­nation have declared war on Bill Shorten’s negative gearing overhaul and will mount a four-week campaign using customer databases to target buyers, sellers, landholders and tenants in key marginals seats.

The Real Estate Institute of Australia, which represents about 95 per cent of the 36,000 businesses that employ about 120,000 ­people, is leading the push to coincide with the election campaign.

The industry-backed campaign will harness social media platforms including Facebook, Instagram and Twitter to promote key attack lines against the Labor ­policy, arguing that it will reduce property prices in a cooling market, fail to raise the forecast revenue and pose a danger to the Australian economy.

REIA president Adrian Kelly.

REIA president Adrian Kelly said the group had never been ­consulted about Labor’s negative gearing shake-up and that ­individual real estate agents would provide tailored warnings to ­­inves­tors, homeowners and renters about how the overhaul would ­affect them. He said the REIA would co-­ordinate the campaign across its real estate networks and use customer databases within individual businesses to reach as many voters as possible.

“It will ensure that the issues ­relating to the taxation of property are an integral part of the campaign and that all political parties, candidates and voters know the consequences of the opposition’s policy on negative gearing and capital gains tax,” Mr Kelly said.

“Our industry makes a huge contribution to the economy and REIA does not want to see ­economic growth put at risk by the proposal.”

Under Labor’s policy, negative gearing would be restricted to new dwellings and grandfathered for people using the tax break on ­existing homes.

The policy, along with Labor’s plan to halve the capital gains tax discount, is due to start on January 1.

Opposition Treasury spokesman Chris Bowen, who on Wednesday revealed a blowout in the number of investors likely to claim tax concessions under his negative gearing shake-up, took aim at the industry campaign against the Labor policy.

“There’s no surprises here that vested interests in the property sector are arguing against the ­reform of tax concessions for those seeking their fifth or sixth investment property while many first-home buyers are still locked out of the housing market,” Mr Bowen said. “There’s no news here. These vested interests campaigned against Labor’s housing affordability reforms in 2016 and will do it again this time.’’

But Rob Westwood, director of First National Real Estate in ­Werribee, an outer western suburb of Melbourne, said most investors who negatively geared in the area were not rich. “The average sale price is about $450,000 at the moment,” Mr Westwood said. “So this is affecting Joe Average. We live and operate in a Labor stronghold. So the effect on their own voters, so to speak, is going to be severe.

“It’s certainly going to effect our buyer base. It’s going to create a shortage of rental properties, which will increase rents.”

Mr Westwood, whose agency is in the safe Labor seat of Lalor held by Joanne Ryan, said he would participate in the social media campaign being organised by the REIA.

“We will actively be sharing that through our social media and making buyers and sellers aware,” he said. “They are possibly going to be losing out because the people they vote for want to chop down a couple of fat cats.”

The REIA — which represents major real estate outlets such as LJ Hooker, Ray White, Richardson & Wrench and Century 21 as well as business operators in regional Australia — has instructed its membership to display materials in their shopfronts sounding the alarm on the Labor policy. Campaign material includes e-flyers warning the Labor policy will drive down property prices and erode the retirement nest eggs of 18 million Australians.

Mr Bowen triggered alarm on Wednesday when he said the latest PBO costing of his negative gearing policy assumed that 22 per cent of new property investors would buy newly built homes and negatively gear them in the first year of the policy — a marked increase on the 12 per cent figure that underpinned the 2016 costing.

The Parliamentary Budget Office’s 2016 costings forecast that the negative gearing and capital gains crackdowns combined would raise $1.9 billion over the forward estimates and $37.3bn over a decade. Last month, the PBO said they would raise $2.9bn over the next four years and $35.1bn over the decade — despite the rise in the number of investors who would receive the tax break.

Property Council of Australia chief executive Ken Morrison said the new figures showed how complex the policy area was.