Negative gearing: Australian seats with the most taxpayers with negatively geared properties
Labor MPs have backed a federal move to gain expert advice on negative gearing after Prime Minister Anthony Albanese left the door open to reforming the tax rules on investment properties if he could be convinced it would not reduce housing supply.
The support came as a new report highlighted the political risks of sweeping change, with more than 120,000 voters taking advantage of the property tax concessions in the 20 most marginal federal seats.
Prime Minister Anthony Albanese
Prime Minister Anthony Albanese CREDIT: ALEX ELLINGHAUSEN
Albanese said he had “no plans” to change negative gearing and had not asked his officials to examine the reform options, after a day of furious Coalition demands for the government to reveal its intentions.
Eight Labor MPs threw their support behind considering a fresh approach to tackling the housing crisis after this masthead revealed on Wednesday that Treasury officials had started work on options to scale back negative gearing and capital gains tax concessions.
Albanese distanced himself from the modelling work and expressed his concern that changing negative gearing would hurt investment and reduce housing supply, naming this as a key issue in any decision about the tax rules.
“I have no plans to do it. It’s not our policy,” Albanese told radio station 2GB.
“The key is supply. My concern with proposed changes to negative gearing is that it won’t assist supply – and, indeed, the work that the Property Council has done is that it would dampen supply.
“It would have to convince me, and would need to convince people, that any impact of any policy changes would not have a downward side on supply. The truth is that, at the moment, that has not been done. It’s as simple as that.”
Treasurer Jim Chalmers said it was “not unusual” for his department to canvass policy options, while Albanese did not say whether he had asked Chalmers if Treasury was doing the work.
“Treasury looks at all kinds of different policies from time to time,” Chalmers said.
Former treasurer Joe Hockey cautiously backed the case for change and Liberal MP Bridget Archer said negative gearing had to be on the agenda, highlighting the support for change on the conservative side of politics.
A new analysis by the Parliamentary Library, commissioned by independent senator David Pocock and based on statistics from the Australian Taxation Office, reveals the growing use of negative gearing across safe Liberal and Labor electorates as well as marginal seats.
The findings show there were more than 13,000 taxpayers with net rental losses in the Labor electorate of Bennelong in Sydney and more than 10,000 in the Liberal electorate of Menzies in Melbourne, two of the key marginal electorates at the next election.
The report also shows there were more than 10,000 in the Labor seat of Tangney in Western Australia and more than 8,000 in the Liberal electorate of Deakin in Melbourne, two other key marginals.
Pocock received the updated figures from the Parliamentary Library on Wednesday after calling for action on negative gearing over the past year.
“Tax reform on its own won’t solve the housing crisis but it can be a powerful tool to drive new supply and should be on the table for sensible debate,” he said.
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Coalition finance spokeswoman Jane Hume accused the government of “lying to the Australian people” because it should be honest with voters if it was considering any changes.
A series of Labor MPs went public on Wednesday to advocate a broader conversation about housing policy, with Victorian Labor MP Michelle Ananda-Rajah saying the government should look at all options to improve accessibility and affordability.
“I am interested in looking at negative gearing, capital gains tax and the top marginal tax rate,” she said.
Victorian Labor MP Maria Vamvakinou also backed the case for modelling changes, saying: “I think we need to discuss the issue of housing affordability in the context of all factors, including negative gearing and family trusts.”
Victorian Labor MP Rob Mitchell said that people were hurting because of the high cost of housing and that “we have been talking about this since 2017, this didn’t start under Labor”.
“My personal view is that it [negative gearing] is something going forward to look at, to limit the number of properties but the biggest issue facing housing is still supply,” he said.
WA Labor MP Zaneta Mascharenas urged the Coalition and Greens to support the government’s housing measures. Asked if she would support debate and possible changes to negative gearing, she said: “I would welcome the Government’s consideration of all options that could help ease the pressure on housing.”
Victorian MP Josh Burns, who faces a strong challenge from both the Greens and the Liberals in his inner-Melbourne seat of Macnamara, said Labor had policies on the table now that would help thousands of renters and people looking to buy their first home.
“We will always look for ways to make this easier and better – and I’m open to solutions if it helps my community,” he said.
A refresher on negative gearing and the capital gains discount
Negative gearing: when an investor purchases a property with a loan, and the rent they get from it is less than the costs (including interest, rates and maintenance) of owning it. When this happens, the investor can subtract the net loss from their other income, reducing their taxable income.
Capital gains tax discount: capital gains on assets (this can include things like shares, as well as housing) are taxed like other forms of income when you sell them, but with a 50 per cent discount if they’ve been held for at least 12 months.
Labor MP Mike Freelander, who holds the western Sydney electorate of Macarthur, said younger voters wanted action on housing.
“There’s a huge generational inequity in the property market at the moment and we need to change it – whether it is symbolically or otherwise,” he said.
Labor MP Sally Sitou, who holds the seat of Reid in inner-western Sydney, said buying a home was getting harder for too many people, adding that the Coalition and the Greens should back the government’s measures to improve supply.
“Housing affordability is at a genuine crisis point and we must find solutions to ensure all Australians have a place to call home,” she said.
“I think that should include increasing housing supply as well as planning reforms and strengthening the rights of renters.” Sitou did not mention negative gearing in her statement.
Victorian Labor MP Sam Rae told ABC Radio in Melbourne that he wanted the Albanese government “to consider any changes that are necessary to make our community a better community and our society a fairer and safer society”.
But Susan Templeman, the Labor member for Macquarie, told ABC TV she was “twice bitten and three times shy” about negative gearing after Labor took the idea to two elections and lost both.
Former Labor leader Bill Shorten, who lost the 2016 and 2019 elections with changes to negative gearing and capital gains tax as a centrepiece policy, declined to comment.
However, he has previously argued that it was not these proposed changes that cost Labor the two elections.
Hockey, a former Liberal treasurer who advocated change to negative gearing and superannuation tax concessions in his valedictory speech in 2015, said negative gearing reforms should be considered but warned of unintended consequences and added that rental subsidies may be needed to offset the impact of changes.
“Negative gearing needs to be looked at, you should look at every tax deduction, to see if it is productive,” he said.
Liberal MP Bridget Archer said negative gearing had become a “sacred cow” for some but should be on the agenda in any discussion about new policies.
“If we’re serious about the housing problem, there should not be any sacred cows – everything should be on the table and we should be prepared to have a reasonable discussion around the whole spectrum of issues,” she said. “And one of those things has got to be negative gearing.”
Coalition foreign affairs spokesman Simon Birmingham questioned why the government was looking at “tax grabs”, telling Sky “their spending is out of control and therefore they’ve got to keep looking for additional tax hits”.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
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Negative gearing: Australian seats with the most taxpayers with negatively geared properties
Labor MPs have backed a federal move to gain expert advice on negative gearing after Prime Minister Anthony Albanese left the door open to reforming the tax rules on investment properties if he could be convinced it would not reduce housing supply.
The support came as a new report highlighted the political risks of sweeping change, with more than 120,000 voters taking advantage of the property tax concessions in the 20 most marginal federal seats.
Prime Minister Anthony Albanese
Prime Minister Anthony Albanese CREDIT: ALEX ELLINGHAUSEN
Albanese said he had “no plans” to change negative gearing and had not asked his officials to examine the reform options, after a day of furious Coalition demands for the government to reveal its intentions.
Eight Labor MPs threw their support behind considering a fresh approach to tackling the housing crisis after this masthead revealed on Wednesday that Treasury officials had started work on options to scale back negative gearing and capital gains tax concessions.
Albanese distanced himself from the modelling work and expressed his concern that changing negative gearing would hurt investment and reduce housing supply, naming this as a key issue in any decision about the tax rules.
“I have no plans to do it. It’s not our policy,” Albanese told radio station 2GB.
“The key is supply. My concern with proposed changes to negative gearing is that it won’t assist supply – and, indeed, the work that the Property Council has done is that it would dampen supply.
“It would have to convince me, and would need to convince people, that any impact of any policy changes would not have a downward side on supply. The truth is that, at the moment, that has not been done. It’s as simple as that.”
Treasurer Jim Chalmers said it was “not unusual” for his department to canvass policy options, while Albanese did not say whether he had asked Chalmers if Treasury was doing the work.
“Treasury looks at all kinds of different policies from time to time,” Chalmers said.
Former treasurer Joe Hockey cautiously backed the case for change and Liberal MP Bridget Archer said negative gearing had to be on the agenda, highlighting the support for change on the conservative side of politics.
A new analysis by the Parliamentary Library, commissioned by independent senator David Pocock and based on statistics from the Australian Taxation Office, reveals the growing use of negative gearing across safe Liberal and Labor electorates as well as marginal seats.
The findings show there were more than 13,000 taxpayers with net rental losses in the Labor electorate of Bennelong in Sydney and more than 10,000 in the Liberal electorate of Menzies in Melbourne, two of the key marginal electorates at the next election.
The report also shows there were more than 10,000 in the Labor seat of Tangney in Western Australia and more than 8,000 in the Liberal electorate of Deakin in Melbourne, two other key marginals.
Pocock received the updated figures from the Parliamentary Library on Wednesday after calling for action on negative gearing over the past year.
“Tax reform on its own won’t solve the housing crisis but it can be a powerful tool to drive new supply and should be on the table for sensible debate,” he said.
Loading
Coalition finance spokeswoman Jane Hume accused the government of “lying to the Australian people” because it should be honest with voters if it was considering any changes.
A series of Labor MPs went public on Wednesday to advocate a broader conversation about housing policy, with Victorian Labor MP Michelle Ananda-Rajah saying the government should look at all options to improve accessibility and affordability.
“I am interested in looking at negative gearing, capital gains tax and the top marginal tax rate,” she said.
Victorian Labor MP Maria Vamvakinou also backed the case for modelling changes, saying: “I think we need to discuss the issue of housing affordability in the context of all factors, including negative gearing and family trusts.”
Victorian Labor MP Rob Mitchell said that people were hurting because of the high cost of housing and that “we have been talking about this since 2017, this didn’t start under Labor”.
“My personal view is that it [negative gearing] is something going forward to look at, to limit the number of properties but the biggest issue facing housing is still supply,” he said.
WA Labor MP Zaneta Mascharenas urged the Coalition and Greens to support the government’s housing measures. Asked if she would support debate and possible changes to negative gearing, she said: “I would welcome the Government’s consideration of all options that could help ease the pressure on housing.”
Victorian MP Josh Burns, who faces a strong challenge from both the Greens and the Liberals in his inner-Melbourne seat of Macnamara, said Labor had policies on the table now that would help thousands of renters and people looking to buy their first home.
“We will always look for ways to make this easier and better – and I’m open to solutions if it helps my community,” he said.
A refresher on negative gearing and the capital gains discount
Negative gearing: when an investor purchases a property with a loan, and the rent they get from it is less than the costs (including interest, rates and maintenance) of owning it. When this happens, the investor can subtract the net loss from their other income, reducing their taxable income.
Capital gains tax discount: capital gains on assets (this can include things like shares, as well as housing) are taxed like other forms of income when you sell them, but with a 50 per cent discount if they’ve been held for at least 12 months.
Labor MP Mike Freelander, who holds the western Sydney electorate of Macarthur, said younger voters wanted action on housing.
“There’s a huge generational inequity in the property market at the moment and we need to change it – whether it is symbolically or otherwise,” he said.
Labor MP Sally Sitou, who holds the seat of Reid in inner-western Sydney, said buying a home was getting harder for too many people, adding that the Coalition and the Greens should back the government’s measures to improve supply.
“Housing affordability is at a genuine crisis point and we must find solutions to ensure all Australians have a place to call home,” she said.
“I think that should include increasing housing supply as well as planning reforms and strengthening the rights of renters.” Sitou did not mention negative gearing in her statement.
Victorian Labor MP Sam Rae told ABC Radio in Melbourne that he wanted the Albanese government “to consider any changes that are necessary to make our community a better community and our society a fairer and safer society”.
But Susan Templeman, the Labor member for Macquarie, told ABC TV she was “twice bitten and three times shy” about negative gearing after Labor took the idea to two elections and lost both.
Former Labor leader Bill Shorten, who lost the 2016 and 2019 elections with changes to negative gearing and capital gains tax as a centrepiece policy, declined to comment.
However, he has previously argued that it was not these proposed changes that cost Labor the two elections.
Hockey, a former Liberal treasurer who advocated change to negative gearing and superannuation tax concessions in his valedictory speech in 2015, said negative gearing reforms should be considered but warned of unintended consequences and added that rental subsidies may be needed to offset the impact of changes.
“Negative gearing needs to be looked at, you should look at every tax deduction, to see if it is productive,” he said.
Liberal MP Bridget Archer said negative gearing had become a “sacred cow” for some but should be on the agenda in any discussion about new policies.
“If we’re serious about the housing problem, there should not be any sacred cows – everything should be on the table and we should be prepared to have a reasonable discussion around the whole spectrum of issues,” she said. “And one of those things has got to be negative gearing.”
Coalition foreign affairs spokesman Simon Birmingham questioned why the government was looking at “tax grabs”, telling Sky “their spending is out of control and therefore they’ve got to keep looking for additional tax hits”.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.