Don’t expect much change in the property sector from the new government
Whoever said change is good obviously didn’t speak to our new Coalition government. As reported in an article on news.com.au, the indications are that they are not intending to introduce any major changes to the laws governing property any time soon. They may only be the fifth new government in forty years but, contrary to what many believed might happen, they’re not taking that as an opportunity to affect changes to laws – certainly not yet anyway.
Homeowners and investors may have either feared, or been excited by, the prospect of changes to laws which would affect them but the Coalition has so far indicated that real estate is not on its list of areas to be tackled in any way for several years. Indeed, it has said that it will tread slowly when it comes to making changes to any laws and has not mentioned property as a sector which will come under scrutiny just yet. In fact, the biggest change is an end to change. That is, the new government is expected to put a stop to sudden and frequent changes to tax rules and other economic policies.
So what can we expect from the Coalition when it comes to property? The market is still only slowly rebounding from the slump which adversely affected so many so the government knows it is wise to not to make any huge changes which could affect that recovery. On the other hand, help in the form of handouts is also unlikely to be forthcoming thanks to extremely tight state and federal Budgets and rock-bottom interest rates, as are the changes that many would appreciate, such as those to the severe land tax systems.
No change could be a good thing for property investors. For example, there are those who wish to see negative gearing (where money is borrowed to purchase an investment without the investor receiving enough income from that investment to cover the interest expenses and costs to maintain it) tax breaks for property investors removed but, thanks to a disastrous attempt to do just that in the 1980s, such a change is highly unlikely to happen. It is thought that negative gearing benefits may be slightly reduced but not for many years to come.
Industry experts believe that if changes are to occur it won’t be down to the Coalition. The economy, both in this country and of those across the globe, is still rocky, which, added to the worry of rising unemployment, is hurting consumer confidence. That, plus the risk that interest rates could easily rocket, is not encouraging market growth. It is therefore predicted that owners of and investors in real estate will be affected to a greater extent by events that are totally beyond the government’s control.
The Coalition has promised to restore the Australian Building and Construction Commission within three months of Parliament’s first sitting but, whether this comes as good or bad news, it seems that the real estate industry will remain largely untouched by Tony Abbott’s new Coalition government.
By Corey K (follow me on Google )