Are these Queensland’s most ‘Aussie’ homes? Labor says the changes will boost housing supply and jobs, but according to REIQ Townsville Zone Chairman Wayne Nicholson, no good will come from the policies, and instead they will create a supply and demand issue in Townsville’s property market.“We haven’t seen investors in Townsville’s residential real estate for almost eight years and that’s largely because the vacancy rate was through the roof … Then of course the floods hit, and the vacancy rate in Townsville now is around 1.5 per cent,” Mr Nicholson said.“So, just when we thought the investor might get interested again, we have these potential changes to negative gearing and the capital gains tax … We need investors buying residential property for people to rent, and they’re not going to do that if there’s a 50 per cent increase in capital gains tax, and a change to negative gearing.” Property prices are rising in these Townsville suburbs REIQ Townsville Zone Chairman Wayne Nicholson, and local investor Dave Lamari, have voiced their concerns about Labor’s negative gearing and capital gains tax policies. Picture: Shae Beplate.WITH the federal election on the horizon, the attention of property investors across the country has turned to Labor’s proposed changes to negative gearing and capital gains tax.The Labor Party has outlined its plan to limit negative gearing to new housing only from 1 January 2020, meaning investors will no longer be able to claim losses that arise from property investments to reduce their taxable income, unless it is an investment made prior to that date or a new dwelling.The opposition also plan to halve the capital gains tax deduction from 50 per cent to 25 per cent for all assets purchased after the same date. READ MORE: Flood victims back on their feet post-disaster REIQ Townsville Zone Chairman Wayne Nicholson, and local investor Dave Lamari, have voiced their concerns about Labor’s negative gearing and capital gains tax policies. Picture: Shae Beplate.“I’m an existing investor so any negative gearing benefits that I have within my property, I can continue to use, however when you change the rules so that existing property is not as appealing to an investor, it essentially changes the market of the existing buyers for my home,” Mr Lamari said. “The Labor Party do point out in their proposal that if you want to be an investor you still can because you can buy a new home … But the problem I have with that is it will essentially mean that the only place it will be viable to buy a home is in a new development, and that will create rental slums, where basically investment groups buy in one area and it’s all rentals.” “No astute investor should buy a property that’s surrounded by other rentals — that’s bad investing.” READ MORE IN REAL ESTATE NEWS Townsville houses damaged during the floods. Picture: Zak SimmondsA survey by the Property Council of Australia, revealed that the 33 per cent of potential investors said they would “probably or definitely” buy a newly-built investment property in the next five years under the existing tax arrangements. This number drops to 24 per cent under Labor’s proposed changes.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“If you accept that real estate thrives on the supply and demand factor and nobody’s putting new rental properties in the pool — then it stands to reason, the rental prices are going to go through the roof and it will be the tenant who is paying for that policy.” Labor member for Herbert, Cathy O’Toole said the changes aren’t to help investors but are intended to help drive home ownership, particularly for new home buyers.“Labor’s changes will help first home buyers in Townsville get into the market and help the budget bottom line; this will mean that we can put more money into nation-building investments like schools, hospitals and infrastructure projects,” Ms O’Toole said.“This is about driving higher home ownership by levelling the playing field.”“First home buyers should have a fair go at buying a house, they should not have to compete with investors who are being subsidised to buy their sixth or seventh property.”The opposition has included grandfathering in both its policies meaning that all investments made prior to 1 January 2020 will not be affected by the changes to negative gearing or the capital gains tax. “If you already use negative gearing, nothing changes. It’s not retrospective. People can still use negative gearing for the purchase of new houses,” Ms O’Toole said.Townsville Investor and Principal at Huggable Home Loans Dave Lamari said Labor’s changes to negative gearing and capital gains tax will have an impact on his existing property, and he believes it will deter future investors — including himself.