Opposition Rejects Any Change to Negative Gearing

Opposition Leader Peter Dutton has said the Liberal-National Coalition will not alter negative gearing if they win the upcoming election.
Debate over negative gearing and capital gains tax reforms has resurfaced following the government’s decision to review them.
Although there is no clear indication of whether these measures will be scrapped, Labor has confirmed it is reviewing the tax arrangements, saying it was a routine as it does with any policy from time to time.
“We are strongly opposed to any changes to negative gearing as it would disrupt the housing market,” said Dutton.
He further explained, “It will lead to higher rents and is not in the best interest of the nation.”
He also criticised Prime Minister Anthony Albanese for shifting positions on whether the government plans to adopt the Greens’ proposals to abolish or limit negative gearing.
Negative gearing is an investment strategy commonly used in Australian real estate. When the costs of owning an investment property exceed the income it generates, investors can claim the loss as a tax deduction, thereby reducing their taxable income and overall tax liability.
This strategy typically relies on the expectation that the property’s value will appreciate over time, allowing for a profitable sale despite short-term losses.
The Greens argue the policy favours investors over first-time buyers.
“Millions of Australians have hope now. They could see a phase-out of negative gearing and the capital gains tax discount, and if we phase out those discounts, they’ll finally have a chance to buy a home and build a good life,” said Greens MP Max Chandler-Mather, member for Griffith, on Sept. 26.
He claimed Australia had seen a 35 percent increase in property investors entering the market in the last 12 months alone.
Albanese stressed that their key focus is increasing the housing supply, which remains their primary objective.
“We have allocated $32 billion for the Homes for Australia plan. We want more public housing, more build-to-rent units, but that’s stuck in the Senate,” he said.
Labor has been attempting to pass two key bills—Help to Buy and Build to Rent—but has struggled to secure support from the Greens and the Coalition.
When asked whether he believed negative gearing was equitable for all Australians, Albanese noted that, without investment in housing, there would be fewer private rentals, less supply, and reduced construction.
“This is why the Build-to-Rent scheme will provide incentives through the tax system for more housing construction,” he said.
On Sept. 25, Treasurer Jim Chalmers dodged questions about negative gearing, simply stating, “We’ve got a housing policy, and that’s not in it.”
“Negative gearing is a legitimate tax deduction, similar to any other investment where a loss is incurred,” he told The Epoch Times.
However, he acknowledges that its direct impact is uncertain.
“Some investors place more value on negative gearing than it’s really worth, so the impact may be larger than economists think,” he said.
Meanwhile, a report released by Housing Investment Australia (HIA) points out that negative gearing is not unique to Australia. Germany, Japan, Canada, and Norway have similar schemes.
“The crisis is a result of various factors apart from negative gearing alone. In reality, I have seen some first home buyers, or cashed up buyers, also contributing to the housing crisis by inflating the prices of properties in the market because they put their emotions into buying a property than applying their logic,” he told The Epoch Times.
The principal of Androit Tax Consulting also said negative gearing did not last forever.
“A property at some stage, maybe after a period of 8-10 years—or earlier—will start earning positive income once the mortgage comes under control and depreciation benefits diminish. So this alone cannot be the cause of housing crisis.
“The government should look into other aspects including the application of stamp duty, and capital gains tax concessions to come up with a comprehensive solution.”
Patel also said lending policies could be changed for investors with multiple properties.
“Hard working mom and dads who wish to have fewer than five properties as a portfolio should not be punished, in my view.”