What happens if the government was to change the negative gearing laws?
It is common public knowledge that both the Liberal and Labor Parties want to retain negative gearing in its current state. It is also common public knowledge that when the Labor government changed the law in the mid eighties, reversed eighteen months later, because it affected the economy right across the board. In fact, the then Liberal Prime Minister, Mr. John Howard, stated that negative gearing was not part of the governments tax reform, and he would not review the rules. Speaking on 3AW he said: The problem with getting rid of negative gearing is that you would push rents up very sharply. You would depress house prices and that would have an effect on people. Negative gearing allows people to borrow money to buy property and other investments, and use the cost of the loan such as the interest to cancel out part of their overall tax bill. (Source: The Sunday Age, 22nd March 1998) Recently it was announced that the government was considering ways to encourage even more investment i
