Scrapping tax deductibility not the way to go

“It would achieve the same purpose with a less disruptive impact,” Gordon says.

The Government’s complete removal of interest deductibility came as a surprise to economists when new housing rules were outlined to skew the housing market from investors to first home buyers. 

Gordon says it was never going to be easy for the Government to thread the needle between housing affordability and encouraging new housing supply without disrupting the economy’s recovery from the Covid-19 shock.

However, he says the tax deductibility change veers too far in one direction.