It is always a good idea to understand a little about a leaders background and how this may impact on their thinking, especially if that leader is head of Government and also has a reasonable say in policy making. So, let’s look at Malcolm Turnbull’s background on property investment. The first place we should start is to look at whether he has indeed invested in property and to what extent…well our Prime Minister and his family do have quite a portfolio according to Domain September 15th article including;
- A Waterfront family home in the blue chip suburb of Point Piper valued at $50m
- They sold the house next door for $13.6 m
- He owns his own office space in Elizabeth Bay
- The family own a property in the Hunter Valley
- He owns a penthouse in Canberra
- They own an apartment in New York
Their children have bought and sold property in Sydney in the millions.
It appears Malcolm and Lucy Turnbull and family, have proved to be savvy real estate investors and have created substantial wealth by buying smart and adding value to their holdings, therefore you would think he understands the benefits of property investing. Malcolm Turnbull comes to the role as perhaps the most urbanist Prime Minister ever. It would appear he has deep understanding of the importance of cities in the economy and people’s lives and the role mum and dad property investors play in providing accommodation. If Sydney, Melbourne, Brisbane and Perth contribute more than 80% of Australia’s economy in GDP terms, and reports show that three quarters of Australia’s population growth over the next two decades will be in our four major cities, he will need to ensure he gets policy in this area right.
Mr Turnbull effectively put Superannuation Tax Concessions, capital gains breaks for investors and negative gearing back into the tax reform mix after they were all ruled out by his predecessor, Tony Abbott. A quote from the prime minister “There are many levers in the tax system, many possible combinations of measures, and it’s important that we look at all of them,” he said. “We’ve got to look at all of the levers and measures we can, to improve incentives that make us more productive. While it is a tall order politically and economically to remove negative gearing, Mr Turnbull might consider grandfathering or scaling back negative gearing on Australian housing .The government was scheduled to release a draft tax white paper in October with the final version in the new year. Treasurer Scott Morrison said he would continue with the white paper process.
Yes Malcolm Turnbull and his family hold a substantial portfolio of property and it appears have created a lot of wealth from property investments over the years and I am sure he appreciates the importance of incenitivising growth in this area , but I stand by my previous articles stating that you shouldn’t be surprised if there are changes at some time in the future with “Negative Gearing”. I do believe however, due to his deep understanding of the economics, that the changes will be such to ensure that Mum and Dads will continue to receive incentives to invest in property…. but will those incentives be enough to encourage investment in property?
Only time will tell.
Regards David Naylor
Founder & Non Executive Chairman Chan & Naylor Accountants www.chan-naylor.com.au
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.