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SYDNEY real estate king John McGrath sees the proposed changes to negative gearing laws as a potential wealth killer for average Aussies, and he warns that both sides of politics are left wanting when it comes to genuine tax reform.
McGrath, speaking at a Gold Coast Central Chamber of Commerce luncheon, says property is by far the greatest wealth creator in the country. He also sees the focus on negative gearing as an opportunity missed to bring about change to other parts of the taxation system that stymie investment.
"Property is the backbone of almost every Australian's core wealth," he says.
"When you look at most people and you talk to them in their 50s, 60s, 70s and you look at their balance sheet, the majority of people make money through property.
"I think it is such a disappointment that, rather than focusing on less productive areas of great waste it is about killing the goose that laid the golden egg. This is not a political statement because both parties are as average as each other in this regard."
McGrath says stamp duty is one of those taxation measures that could do with a shake-up.
"When you think about stamp duty, and the fact that when someone buys a house you have to pay $40,000 to rubber stamp a million-dollar purchase, that is absurd for me," he says.
"Then you have capital gains tax on everything except your own home. Then you have all sorts of different taxes along the way, including income tax on tenants and local council taxes.
"I get that there is a cost associated with living in the lucky country, but I also think that you have to be careful with things like property.
"For the average Australian, who doesn't have the sophistication or the advice to go into say the world of shares, many have somehow cobbled enough money to buy a house.
"They have often waited their whole life, and (that house) has gone from being 45 thousand pounds to $2 million.
"I hope that the government doesn't look at property without recognising the great value it brings to the country."
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