"The long-held assumption that the home is a safety net for retirees is becoming increasingly dubious as more older people are being forced to rent or use their super to reduce their mortgage in retirement," Ms Scheerlinck said.
Ms Scheerlinck said it was time to re-examine the role of negative gearing and Capital Gains Tax concessions and for policymakers to consider proposals to modify these measures. Ms Scheerlinck said negative gearing had been shown to fuel house price rises, adding that the measure directed Government tax expenditure into unproductive assets.
"Unlike superannuation – where investments are spread across a diverse range of assets, including infrastructure and, increasingly affordable housing – the majority of tax expenditure on negative gearing flows into unproductive, existing housing."
"The conversations in the qualitative stage with parents who negative gear show just how much they trust that their investment properties will support them in old age. And yet in order to invest they are moving into semi-retirement and retirement with debts. It’s a risky strategy for some. As a result the children don’t believe there will be much left down the track for the next generation to inherit," Ms Huntley said.
Snapshot of key findings
· 79% of all survey respondents said they were concerned that rising house prices are locking young people out of the market.
· 95% of property investors said their primary motivation in owning an investment property was to fund a comfortable retirement
· 79% of property investors with children say it is important to have an asset to pass down to their children.
· On third of property investors surveyed have three or more properties.
· 55% of non-property investors support changes to negative gearing, even if this meant prices might fall slightly. This compares with 35% of those who own an investment property supporting changes.
· Among all property investors, 52% believe that an investment property is a better way to save for retirement than superannuation. However, of those without an investment property (a group more reflective of the wider Australian population), there is a more favourable view of superannuation - 35% believe that investment properties are superior to superannuation. Among the interviews conducted with negative gearers, there was a near-uniform view that property is a lower risk and higher yield investment than superannuation.
· 47% of property investors expect to go onto retirement with debt.
*Online public poll of 649 people, including 250 who owned a negatively geared investment property. Link to research
Link to research: http://www.aist.asn.au/media/1135293/aist_home-truths-negative-gearing-and-retirement_2018.pdf ---
