The Income Tax Treatment of Housing Assets: An Assessment of Proposed Reform Arrangements

AHURI Final Report No. 295, Australian Housing and Urban Research Institute Limited, Melbourne, doi:10.18408/ahuri-8111101; ISBN: 978-1-925334-59-3

74 Pages Posted: 13 Mar 2018

See all articles by Alan Duncan

Alan Duncan

University of Nottingham - School of Economics; University of Melbourne - Melbourne Institute of Applied Economic and Social Research; Curtin University of Technology - Curtin Business School - Bentley Campus

Helen Hodgson

Curtin University - Curtin Law School

John Minas

University of Tasmania

Rachel Ong

Curtin University - Centre for Research in Applied Economics; Curtin University - School of Economics and Finance

Richard G. Seymour

University of Sydney Business School

Date Written: March 7, 2018

Abstract

This research models several politically acceptable pathways to reform negative gearing and CGT so as to reduce impacts on less sophisticated property investors. Two reform models—a rental deduction cap of $5,000 and a progressive rental deduction based on income—could lead to savings of over $1.7 billion each. Both are progressive in nature, reducing tax savings from negative gearing as tax assessable income increases.

Keywords: negative gearing, capital gains tax, private rental housing, urban policy, taxation, real estate investment, housing policy, australia

JEL Classification: E22, E61, E64, H21, H24, R21, R31, R38

Suggested Citation

Duncan, Alan and Hodgson, Helen and Minas, John and Ong, Rachel and Seymour, Richard G., The Income Tax Treatment of Housing Assets: An Assessment of Proposed Reform Arrangements (March 7, 2018). AHURI Final Report No. 295, Australian Housing and Urban Research Institute Limited, Melbourne, doi:10.18408/ahuri-8111101; ISBN: 978-1-925334-59-3. Available at SSRN: https://ssrn.com/abstract=3135645

Alan Duncan (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Curtin University of Technology - Curtin Business School - Bentley Campus ( email )

GPO Box U1987
Perth WA 6845
Australia

Helen Hodgson

Curtin University - Curtin Law School ( email )

Australia

John Minas

University of Tasmania ( email )

Newnham Drive
Newnham
Launceston, TAS
Australia
+61 3 6324 3221 (Phone)

Rachel Ong

Curtin University - Centre for Research in Applied Economics ( email )

GPO Box U1987
Perth, Western Australia 6845
Australia

Curtin University - School of Economics and Finance ( email )

GPO Box U 1987
Perth, Western Australia 6845
Australia

Richard G. Seymour

University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

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