Repair and maintenance work, the mainstay of several small business owners in the building industry, could be significantly impacted with the introduction of a new policy on negative gearing by the Labor Government.
The new policy that imposes restrictions on negative gearing puts at risk more than $1.8 billion invested per year in repair and maintenance work on negatively geared homes.
States that will be majorly impacted by the policy include New South Wales with a total value of $515.9 million, Victoria with $402.0 million and Queensland with $509.4 million, according to recently released ATO figures for 2016/2017.
Master Builders Australia CEO Denita Wawn says thousands of small building businesses and tradespersons in every city, town and region around Australia would feel the impact of the policy if it is rolled out.
Wawn explained that repair and maintenance work was a lifeline for many home builders during tough market conditions. The restrictions on negative gearing will make investing in these essential repairs significantly less attractive, putting their livelihoods at risk.
“This work is not about renovations or capital improvements, it’s not about adding swimming pools or pergolas, this is the day-to-day running repairs that keep a home up to standard for residents and renters,” she says.
Wawn says that the next Federal Government will need to back the thousands of small building businesses who repair and maintain negatively geared investment properties, especially as the housing market softens, instead of introducing policies that will put their businesses at risk.