Australian economist Saul Eslake has claimed that negative gearing in Australia will never be scrapped, despite the ongoing debate among politicians.
Eslake believes that “The tax concession has been a key driver in rising housing prices, providing incentives for investors and tax relief for those who rent out their properties.
It’s also been partly responsible for locking thousands of Australians out of the property market, effectively crushing the great Australian dream, and has contributed to the widely acknowledged housing crisis for the same reasons.
Extraordinary property prices have put pressure on politicians to take action on housing affordability, with stripping the negative gearing tax concession considered one of the simplest and most effective options to drive down prices and open up the market to millennials.
But while it might seem like a no-brainer for those of us desperate to join the homeowners’ club, Mr Eslake explains, it would be one of the dumbest political decisions possible.”