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MPs urged to ignore fearmongering and pass Labor’s ‘long overdue’ negative gearing and CGT changes
TL;DR
Australia's community and housing groups are urging federal MPs to pass Labor's negative gearing and capital gains tax reforms to enhance fairness for renters and first-time homebuyers. The government plans to introduce these changes in the upcoming parliamentary session.
Key points
- Community groups urge MPs to pass Labor's tax reforms
- Changes aim to improve fairness for renters and first homebuyers
- Proposed reforms include limiting negative gearing to new-builds
Australia’s peak community and housing groups have urged federal parliament to quickly pass Labor’s changes to negative gearing and capital gains tax, saying the reforms would improve fairness for renters and young homebuyers.
The government may introduce its negative gearing and CGT changes into parliament as soon as the coming sitting fortnight, with hopes of passing the legislation soon after with the support of the Greens.
The changes include limiting new negative gearing to new-builds and grandfathering existing properties, and changing how CGT is calculated: both reforms were billed by Labor as ways to rebalance the housing market toward first home buyers instead of property investors.
Maiy Azize, of housing advocacy group Everybody’s Home, said there was “no excuse for landlords to hike rents because of these changes”.
“Existing landlords get to keep these tax perks. Any attempt to use these reforms as a justification for raising rents is opportunistic profiteering,” she said.
“We urge all politicians to see through the fearmongering and back these long overdue changes.”
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In a joint statement, the Australian Council of Social Service (Acoss), Everybody’s Home, Better Renting and National Shelter said the changes would “improve fairness and level the playing field”.
The social and housing groups predicted the changes would improve housing stability for renters by encouraging long-term investment in housing, over short-term gains.
It echoes arguments from the housing minister, Clare O’Neil, that limiting new negative gearing to newly built properties would help control rent prices.
Treasury modelling in the budget forecasts 35,000 fewer homes will be built over the next 10 years as investors put their money elsewhere, but the impact on rents is estimated to be an extra $2 weekly for the median renter.
The Acoss policy director, Jacqueline Phillips, said negative gearing and CGT had “supercharged inequality, driven up housing prices, and added little to rental supply”.
“We call on all politicians to back the reforms that are clearly in the national interest,” she said.
But concerns have been raised by some economists, who believe since 2022, as well as some in the property lobby. The shadow treasurer Tim Wilson, has pointed to modelling from SQM Research claiming Sydney rents could increase by $160 weekly, and Melbourne $130 weekly.
Q&A
What are the proposed changes to negative gearing and capital gains tax in Australia?
The proposed changes include limiting negative gearing to new-build properties and altering the calculation of capital gains tax to support first home buyers over property investors.
Why are housing groups advocating for these tax reforms?
Housing groups argue that these reforms will improve fairness in the housing market, making it easier for renters and young homebuyers to compete against property investors.
When is the Australian government expected to introduce these tax changes?
The Australian government is expected to introduce the negative gearing and capital gains tax changes in the upcoming parliamentary sitting fortnight.
