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Ben Kingsley Blog post by Ben Kingsley

What you need to know about Labor’s Negative Gearing policy?

Hello, Ben Kingsley here, CEO and Founder of Empower Wealth. You’re receiving this special email on Negative Gearing because you either are a subscriber or a client in our business. Now tomorrow is Election Day where we get to pick the next Federal Government that is going to lead us for the next three years. But beyond that, it’s going to be hopefully the blueprint that takes our nation forward.

Now Empower Wealth is an apolitical association. That means we don’t care who is in power but what we do care about is what affects you, our clients and people who are learning and getting educated from us. So when we see poor policy like the Labor’s policy on negative gearing, we need to call it out. We need to call it what it’s for. The reality is, it is a bad policy because it is affecting the broader market place so not only will it affect investors, it will also affect the value of properties that are owned by owner occupiers. In addition to that, it will affect tenants in terms of paying more for their rent. Let me explain to you why this is.

When you introduce a policy which affects the market mechanism and basically it means that the policy is only available on new property, you would naturally think that everyone would start to lean towards buying these new properties. But the reality is the properties that we are talking about are usually the poorer performing investments. So investors aren’t going to invest in property anymore, they are going to take their money elsewhere. Now when that happens that is less construction jobs and that is less momentum in the economy. Once you start to see that happening and you see some oversupply in the high rise and medium density accommodation, you’ll see valuations fall. So it’s a really important message that I want to deliver to you around making an informed decision. Now you may choose to vote for Labor or the Liberal or the Greens, whatever your choice is your choice and I compliment you on making a smart decision. We just want to get the facts out there on this particular topic. Now along with this email and this video, you’ll see links to other facts and more important information that you read up on before you vote tomorrow. Again, Australia is a great nation and there is great ways where we can take this nation forward but that policy is not good for economic growth, it is not good for jobs, it is going to see property prices fall and it is going to see rent rise and that is why with my 20 years of experience, I’m calling it out as bad policy.

All the best.

 

Links to facts and findings by other association in the industry:

Property Council of Australia – Click here
Masters Builders Association – Click here
Housing Industry Association – Click here
Real Estate Industry – Click here
Urban Development Institute – Click here
SQM Research – Click here

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