Fresh battle to slash investor's neg gearing, capital gains tax perks

News.com.au

22-04-2025

A new warning that rent will rise by $83 a week if negative gearing is removed could backfire for investors, with figures showing renters have endured much worse than that since 2020.
A fresh battle has broken out as Australia heads to the polls, with investors seeking to maintain their grip on generous tax perks including negative gearing and capital gains exemptions which the Greens have vowed to take away from anyone who owns more than two properties.
Research commissioned by the Australian Institute for Progress from Adept Economics warned that abolishing the investor tax concessions would see the return on investment for rentals fall by between 13–16 per cent.
Adept Economics director Gene Tunny warned that could see significant rent increases within two years of the policy removal as landlords seek to compensate for higher costs, with 'the modelling predicting rents could be 11 per cent higher than they would otherwise be'.
'This equates to $60 –$95 a week higher in capital cities based on current asking rents, with an average of $83 a week.'
Mr Tunny said the removal may see some Australians better off with more people living in their own homes, 'but those stuck in the rental market would be significantly worse off'.
But a report by Everybody's Home found capital city renters had already endured worse rental hikes in just four years of as much as $356 a week higher for houses (Sydney) and $279 a week for units (Perth) since 2020.
On average rent increased by $185 a week for units and $283 a week for houses compared to 2020, with all reports warning it would get worse regardless in coming years.
In Adelaide, units were up $196 a week and houses $256/wk compared to 2020; Brisbane up $199/wk for units and $259/wk for houses; Canberra up $92/wk units and $108/wk houses; Darwin $87/wk units and $281/wk houses; Hobart $42/wk units and $68/wk houses; Melbourne $137/wk units and $207/wk houses; Perth $279/wk units and $352/wk houses; Sydney $201/wk units and $356/wk houses.
Everybody's Home spokesperson Maiy Azize said 'to make housing more affordable, we need to get rid of tax breaks when it comes to property, not create more'.
'The Coalition's proposal to allow mortgage payments to be tax deductible for first home buyers is a form of negative gearing for non-investors, a move that will give more help to people on high incomes and could push home prices even higher,' she said.
'Labor's home deposit support for first-home buyers will also add to demand. Building 100,000 homes is a good step, but they aren't guaranteed to be affordable. Australia doesn't just need new homes, we need homes that people can actually afford.'
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She said 'in this election, Australians are seeking bold, visionary policies that will make housing affordable for everyone. Parties and candidates who are vying for votes must step up and deliver the policies that will shift the dial on the housing crisis'.
'We continue to call on the federal government to end the social housing shortfall, scrap investor tax breaks for property investors, increase Centrelink payments and protect renters from unfair rent hikes.'
Mr Chandler-Mather has vowed to thwart attempts to keep investor tax breaks saying 'Australia has a choice to make: either we give our children and grandchildren the same chance at home ownership that previous generations had, or we continue to give investors with multiple properties billions of dollars in tax handouts. It can't be both.'