The Federal Government's argument that negative gearing mainly benefits average Australians has been undermined by documents obtained from its own Treasury.
Key points:
- FOI report shows more than half of negative gearing tax benefits go to top 20 per cent of incomes
- Bottom 20 per cent of earners getting 5 per cent of benefits
- Modelling predicts negative gearing and CGT policies could add $6b to the budget bottom line
Negative gearing allows investors — notably property investors — to deduct losses against other sources of income, such as wages.
Federal Labor earlier this year vowed to go after the tax deduction if elected, by restricting it to new properties from mid-2017.
An ABC Freedom of Information (FOI) investigation has revealed most of the advantages of the property tax break go to high-income earners.
The modelling — prepared by a third party after Labor's February announcement — said more than half of the negative gearing tax benefits go to the top 20 per cent of incomes in Australia.
"Negative gearing benefits high-income families," the document said.
The report stated those in the bottom 20 per cent were getting just over 5 per cent of negative gearing tax benefits.
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