The correct answer is that nobody knows for sure how it will play out . Not only does it depend on the detail in the policy , it will depend on how the economy is travelling at the same time . With a toppy SYD/MEL market it could be a bad idea right now ?
We see the increase in tax claims against ng . There's no doubt it has increased in the last 10 years or so . What we don't know is the percentage of ng properties in the total . How many properties are positively geared ? Is it 80/20 ? Who knows ? Obviously the smaller the ng percentage , the smaller effect the change will have on prices .
These economic experts like Bill Shorten need to consider another aspect of this potential tax change .
People rent older properties because of their location . Transport , schools , employment etc . That's why older well located property is so popular . It follows that because it is so popular , it get's more expensive . Kind of a vicious circle .
If ng was only for new properties , do they expect that people are going to start knocking down well located properties in order to build new ones ? Inner Sydney or Melbourne for example ? That's only going to make those properties more expensive because of the development cost . Also , you'll be turning the city into a highrise metropolis in order to make the numbers work . Is that what's wanted and would it be allowed ?
The alternative to that is to build new suburbs or even satellite cities . Good in theory but unfortunately no one wants to live there . We already have outlying suburbs where you can buy a new house for a quite affordable price . Why are they so cheap ? Because they have no services near by .
So , if the new tax proposal wants to drive new builds in these areas , then they ( i.e. we the taxpayer ) are going to have to provide more and better services and infrastructure . Fast transport , more schools and hospitals .
It might not be such a money saving idea in the end .
