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Tax cuts announced in the Federal budget this week could slow investor activity and worsen the plight for renters, RP Data warned yesterday.
Cameron Kusher, RP Data senior analyst, said that removing benefits such as the Baby Bonus and Family Benefit Tax B, from high income earning brackets, the Government had potentially created a scenario where people would be less likely to purchase investment properties.
Ironically, he said, these people were likely to own the investment properties rented to people who could not afford to purchase.
Kusher also said the Federal Government’s National Housing Affordability Scheme delivered in the budget, would not do much to improve investment developments in the much needed inner city areas.
The scheme, he said, which will offer incentives of $6,000 to investors who rent properties 20 per cent below market rents, would not be incentive enough to attract large developers to costly inner city areas and would likely only drive developments in outer suburbs where land and rents are more affordable.
Published 16-05-2008
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