There are growing calls for today’s economic reform summit in Canberra to address Australia’s controversial negative gearing and capital gains tax concessions.
Under the current system, property owners claim back billions of dollars in tax concessions. The property industry argues that these policies encourage investment and ensure a supply of rental properties. However, critics contend that they inflate house prices and make homeownership increasingly difficult for ordinary Australians.
Ahead of the summit, the housing campaign group Everybody’s Home released an open letter to Prime Minister Anthony Albanese and Treasurer Jim Chalmers. The alliance of housing advocates, economists, and union leaders argued that reforming negative gearing could unlock billions of taxpayer dollars for building public and community housing.
Everybody’s Home national spokesperson Maiy Azize said too many Australians were paying the price for tax concessions that overwhelmingly benefit the wealthy.
“These tax breaks are among the most unfair and distortionary in our economy,” Azize said. “They make housing less affordable, benefit higher-income Australians, and lock everyday people out of safe and affordable housing. Cutting them and redirecting the savings into low-cost rentals will give more Australians the chance to secure a home.”
Negative gearing applies when the costs of owning an investment—such as interest and maintenance—exceed the income it generates. The owner can then deduct that loss from their overall income, lowering their taxable income and reducing their tax bill. Although it applies to various investments, it is most commonly associated with property ownership in Australia.
