THE Albanese government’s Budget “tips the scales” toward first-home buyers by reshaping housing tax rules and pushing investment into new builds says federal Perth MP Patrick Gorman.
The Albanese government’s first Budget since its landslide victory in last year’s federal election sets out a range of economic and housing measures aimed at improving affordability and supporting first-home buyers.
Mr Gorman says the housing system had become unfair to young buyers, prompting the government to change tax rules to reduce investor advantages and push more building, so more people could afford homes where they grew up.
“If you are a West Australian who’s seen what has been happening in the housing market over recent decades, you would welcome this Budget because it finally makes sure that we tip the scales back in favour of first home buyers and make sure that we have a set of tax policies that support Australians getting into their own home,” Mr Gorman said.
• Patrick Gorrman
Residential property investors will no longer received a 50 per cent tax discount on profits from selling property and are instead taxed more on their actual profit after adjusting for inflation in the calculation.
Investors can only claim property losses if they invested in newly built homes, not existing houses, aimed at tackling the long-debated issue of negative gearing.
Mr Gorman said it would help an additional 75,000 Australians enter the housing market over the next decade while slowing annual house price growth by around 2 per cent to improve affordability.
“It will also help those who are looking to enter the housing market for the first time,” he said.
For small businesses, the Budget allows assets worth up to $20,000 to be immediately written off as a tax deduction in the same year they are purchased, which Mr Gorman said would help businesses invest when it best suited their operations.
He said it was “quite a significant package in terms of helping small businesses”.
“This budget locks in, instant asset write-off as a permanent measure,” Mr Gorman said.
“So, whether it be cafes investing in new refrigeration or a tradie investing in new tools – all of those things can be written off and help with their cash flow.
“What small businesses tell me across Perth is that they don’t want a handout.
“They just want their customers to have that cost of living support so they can keep buying and keep shopping local.”
The Budget also includes $500 million for active transport projects such as footpaths, bike paths and cycleways to improve safe local travel and encourage walking and cycling for short trips, a measure Mr Gorman said he strongly supports.
Fremantle MP Josh Wilson said the Budget delivered a “sensible” reform to housing.
“This budget delivers the housing tax reform and investment that our community has called for,” Mr Wilson said.
“A record $47 billion of investment in housing, and sensible changes to Capital Gains Tax and Negative Gearing will tip the balance towards first home buyers and young Australians.
“Recognising that cost pressures are still hurting too many households, Labor is delivering a $1,000 instant tax deduction and a $250 Working Australians Tax Offset.
“This is on top of the three rounds of tax cuts and record investment to make healthcare more affordable.
“There’s more work to be done but it’s critical that we provide a range of support right now while being prepared to take on big picture reform to make our tax system fairer and reduce intergenerational inequality,” Mr Wilson told the Herald.
by ISLA TOMLINSON and STEVE GRANT