Figures from the Australian Taxation Office shows Australian Residential Property Investors collectively raked up losses totaling $8.6 billion dollars, in a bid to avoid $4 billion in Tax.
The $8.6 billion dollar loss is a increase of 35 per cent over the previous year with Queensland and NSW attributing to 60 percent of the losses.
Dr Ken Henry, Secretary to the Treasury says he prefers a tax system that does not heavily favour debt funding like negative gearing. Ken Henry is Chair of the Australia’s Future Tax System Review panel. The final report has been delivered to the Government and is due to be released in early 2010, although the government appears to be dragging its heals. This has lead to speculation that some of the recommendations will be politically sensitive. One such recommendation could be not to allow property losses to be applied to wages and salary.
» Negative gearing creates investor boom – The Adviser, Thursday 25th March 2010.
Henry Tax Review will recommend the end of this.
But no government will have the bals to action the recommendations.