RBA wants negative gearing review
The Reserve Bank has called for a review of tightening of negative gearing rules allowing property investors to write off rental losses against tax. The RBA blames much of recent lending for residential property on the practice which it says is more generous in Australia than elsewhere. In the UK, for example, it is not permitted for anything but holiday accommodation and in the US only for taxpayers with annual incomes of less than $US 100,000.
In Australia, just over half of investors receiving rental income claim tax losses against their investment properties. The RBA has also focused on stamp duty reductions as a way to help first-home buyers enter the market. The bank says stamp duty concessions have not kept up with increases in house prices.