PIPA In the News

Fri
08 Mar
2019

Plans to limit negative gearing and slash capital gains tax concessions could cost a Labor government $32 billion in over just 10 years, according to new research from Property Investment Professionals of Australia (PIPA).

Modelling by PIPA indicates that if the proposals push through, a lot of investors could be pulled away from the market, leaving a gaping hole in government coffers.

Labor’s claim that their policy would save $32 billion over a decade was a flight of fancy because the significant drop in the number of investors will result in the government losing that amount instead, PIPA Chairman Peter Koulizos claimed.

“Not only that, investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” he said.

Fri
08 Mar
2019

The Commonwealth Treasurer has sought to ward off suggestions that the economy is headed for a recession but has warned that Labor’s housing policy could trigger a deeper downturn.

In light of new GDP data from the Australian Bureau of Statistics (ABS), which reported that the Australian economy grew by 0.2 of a percentage point over the December quarter, below the Reserve Bank of Australia’s (RBA) expectation of 0.5 of a percentage point growth.

GDP growth has now slowed below target for two consecutive quarters, prompting analysts to declare that the economy has fallen into a “per-capita (per person) recession”.

AMP Capital’s chief economist, Shane Oliver, observed: “Coming on the back of just 0.3 [of a percentage point] growth in the September quarter, this is not good news.

Thu
07 Mar
2019

Limiting negative gearing to new investment properties and reducing the capital gains tax (CGT) discount will only drive investors out of the market in droves and leave a gaping hole in the budget.

That's according to PIPA chairman Peter Koulizos, who said the research showed that Labor's assertion that their policy would save $32 billion over a decade was a "flight of fancy" when it was actually set to lose that amount because of drastically fewer investors in the market.

“Not only that, investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” Mr Koulizos said.

The PIPA modelling found that an investor who bought a $675,000 property today would receive about $23,583 in negative gearing benefits over a decade, but they would pay $104,703 in capital gains tax if they sold the asset – leaving the Federal Government with an $81,118 net gain.

Wed
06 Mar
2019

THE CEO of RiskWise Property Research, Doron Peleg, was invited to discuss housing policy with Prime Minister Scott Morrison, Treasurer Josh Frydenberg and Assistant Treasurer Zed Seselja.

Mr Morrison opened last week's meeting which was also attended by such property heavyweights asYellow Brick Road founder and chair Mark Bouris, hedge fund VGI Partners Global Investments director Noel Whittaker, Property Investment Professionals of Australia chairman Peter Koulizos, Real Estate Institute of Australia acting chief Jock Kreitals, the Master Builders Association of Australia and the Property Council of Australia.

Mr Peleg said the property market had already been hit hard with an impact on confidence and lower demand for credit across the country, and the steepest reduction in prices since 1980 in Sydney and Melbourne, with weaker markets like Perth and Darwin also significantly impacted, and more reductions forecast.

Wed
06 Mar
2019

Josh Frydenberg has seized on property industry modelling that suggests Labor's negative gearing and capital gains tax changes could backfire to demand Bill Shorten not bank $32 billion in savings he has pinned to the policy.

The Treasurer said the research by the Property Investment Professionals of Australia found the changes could have a major impact because investors would change their behaviour and stay out of the market.

He said the findings were a "warning shot for Labor and a reminder of why it needs to urgently backflip on its punishing housing tax . Make no mistake, as Australians enter the ballot box later this year, they will know that a vote for Labor is a vote for its housing taxes - a vote that will drive down the value of their home or increase the cost of their rent." PIPA chairman Peter Koulizos said investors already paid almost four times in capital gains tax compared with what they received in negative gearing benefits over a 10-year period "so the government is already ahead financially".

PIPA, which represents agents, brokers and investment firms, said there would be "drastically fewer" investors in the market under Labor's policy, making its costings a "flight to fancy".

Wed
06 Mar
2019

Josh Frydenberg has seized on property industry modelling that suggests Labor's negative gearing and capital gains tax changes could backfire to demand Bill Shorten not bank $32 billion in savings he has pinned to the policy.

The Treasurer said the research by the Property Investment Professionals of Australia found the changes could have a major impact because investors would change their behaviour and stay out of the market.

He said the findings were a "warning shot for Labor and a reminder of why it needs to urgently backflip on its punishing housing tax . Make no mistake, as Australians enter the ballot box later this year, they will know that a vote for Labor is a vote for its housing taxes - a vote that will drive down the value of their home or increase the cost of their rent."

PIPA chairman Peter Koulizos said investors already paid almost four times in capital gains tax compared with what they received in negative gearing benefits over a 10-year period "so the government is already ahead financially".

PIPA, which represents agents, brokers and investment firms, said there would be "drastically fewer" investors in the market under Labor's policy, making its costings a "flight to fancy".

Wed
06 Mar
2019

Modelling by an investor lobby group has found Labor’s proposed policies to change negative gearing and capital gains tax will cost the country $32 billion.

The modelling, which comes from the Property Investment Professionals of Australia, found limiting negative gearing to new properties and cutting down the capital gains tax discount will see many property investors leave the market and cost the country billions of dollars.

PIPA chairman Peter Koulizos said that the modelling disproved the Labor party’s assertion that it would generate $32 billion in savings, and in fact would cost the country that same amount.

“Not only that, investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” he said.

According to PIPA’s modelling, an investor purchasing a property at $675,000, the national median price for property according to the ABS, creates $23,583 in benefits through negative gearing over a decade, but would cost $104,703 in CGT to sell, which translates to an additional $81,118 in the government’s pocket.

Wed
06 Mar
2019

Proposals to limit negative gearing and reduce capital gains tax concessions will cost a Labor Government $32 billion over just 10 years, according to modelling by the Property Investment Professionals of Australia (PIPA).

Their research found that limiting negative gearing to brand new investment properties as well as reducing the capital gains tax discount will "drive investors out of the market in droves and leave a gaping hole in government coffers."

PIPA chairman Peter Koulizos said the research showed that Labor’s assertion that their policy would save $32 billion over a decade was a flight of fancy when it was actually set to lose that amount because of drastically fewer investors in the market.

“Not only that, investors already pay almost four times in capital gains tax what they receive in negative gearing benefits over a 10-year period, so the government is already ahead financially,” he said.

Fri
01 Mar
2019

Labor’s proposed taxation changes have already resulted in poor investor sentiment, which is likely to fall even further should it come to power, one expert has said.

RiskWise Property Research CEO Doron Peleg said that Labor’s position on negative gearing and CGT has and will continue to impact the broader economy and, in particular, GDP growth.

Mr Peleg was invited to join a roundtable discussion in Canberra in February with the PM, the treasurer and assistant treasurer and other property heavyweights, including Yellow Brick Road, the Real Estate Institute of Australia, Property Investment Professionals of Australia and the Property Council.

He said that there were many concerns expressed.

Fri
01 Mar
2019

RiskWise Property Research CEO Doron Peleg was invited to Canberra this month (February) to join a round table discussion with the PM, Treasurer and Assistant Treasurer, and other property heavyweights including Yellow Brick Road, hedge fund VGI Partners Global Investments, REIA, the Master Builders Association, the Urban Development Institute of Australia, the Real Estate Institute of Australia, Property Investment Professionals of Australia and the Property Council. The topic being the nation’s housing policy. He writes:

Attending this meeting to share our research regarding the property market with such high-level decision-makers really brought home the impact Labor’s proposed taxation changes has already had and will continue to have both on the broader economy and, in particular, GDP growth.

I attended the round table discussion to talk about our research and insight but also to listen to the concerns of the others and join in a dialogue with them. The attendees expressed their concerns regarding the impact of the proposed taxation changes on housing prices, dwelling commencements and GDP growth. In particular, it was very interesting to hear the concerns that were raised by the development lobby groups.