The Property Investment Professionals of Australia (PIPA) has welcomed the federal government’s “well-considered” measures to addressing the housing supply and demand-side issues, as revealed in the 2017-18 federal budget.
As the premier body for the property investment industry, PIPA has long campaigned for greater education around property investment, as well as the regulation of property investment advice. PIPA remains dedicated to “supporting a healthy, sustainable property investment industry” in Australia.
Benjamin Kingsley, chair of PIPA, said the association welcomed the federal government’s decision to continue the sensible approach to negative gearing and retain capital-gains tax discounts for Australians.
“We think it is an improving and sensible approach to stabilise the housing market. These measures also give confidence to people who invest in property to provide rental housing and to their family in terms of future financial wellbeing,” Kingsley said.
While the federal government avoided making sweeping changes to negative gearing, Kingsley said the decision to tighten some negative gearing deductions had the potential to create some confusion among property investors.
“We are not completely happy with all aspects of this budget, specifically in regard to travel costs and depreciation deduction changes. We think the government needs to provide more details on this,” he said. “Investors factor in wear and tear costs at the time of purchase to cover the replacement of these plant and equipment items. Given each item claimed is annualised based on age, we don’t understand the government’s concerns around possible additional deductions and double-dipping if the property is later sold.”
Kingsley said that while the budget has unveiled measures designed to continually support infrastructure across the country, more investment was needed in transport to encourage affordable housing supply.
“You will never be able to make inner-city value less expensive due to strong demand versus limited supply. The fast-train concept could help affordability for generations to come given public transport remains the best way to improve the accessibility of satellite cities to major centres,” he said.
Michael Mata, Your Investment Property Magazine Online, 15 May 2017