Australian landlords would loss the tax benefits of negative gearing unless their property met national standards, under a plan to improve conditions for the country’s renters.
A new report from Melbourne’s RMIT University urban policy experts recommends using Australia’s tax system to force investors to improve conditions for private renters.
Co-author Professor Jago Dodson said the reforms would see negative gearing only available to investors whose properties meet national standards for fair rental contracts and construction quality.
Professor Dodson said the benefits for investors would also include discounted capital gains tax, while renters stood to get a better deal with more energy-efficient homes.
He said tax breaks were a “good carrot” for property investors to make things better for their tenants.
“There’s an opportunity to use negative gearing and capital gains tax to make things better for renters, without relying on negotiation with the states.
“It doesn’t require dramatic reform, just some tweaks to our tax laws.”
Professor Dodson said investors would still get their tax benefits, but only if they made positive changes for renters.
He said proposed improvements included having dwellings meet a seven-star energy rating, with heating, cooling and insulation among the requirements.
“Currently only required for new builds, the report recommends expanding the seven-star rating to existing rentals, with investors given tax credits in return for making improvements.”
Professor Dodson said as well as physical improvements there would be minimum quality, safety and security standards covering things such as minimum lease periods and rent increase limits.
“The reforms would also make the standards national, leading to consistency for renters and investors alike.”
