Voters are split over the controversial concessions and both major parties have been grilled over their plans this federal election.
While the Greens have lobbied hard for a reform and leader Adam Bandt blamed the capital gains discount for the housing crisis, Prime Minister Anthony Albanese and Opposition Leader Peter Dutton have denied there will be any changes made to either.
Reports first emerged last year that federal Treasury had investigated a potential overhaul of the tax concessions awarded to property owners.
“It certainly wasn’t commissioned by us to do so,” the PM said when asked during the second debate on Wednesday night about the Treasury modelling.
But Treasurer Jim Chalmers had publicly stated back in September that he asked Treasury for “advice” about the subject, leading Dutton to claim in the debate that Albanese had a “problem with the truth”.
Chalmers yesterday sought to strike a clear difference between that advice and “modelling”.
“I’ve said on a number of occasions now that I sought a view,” Chalmers said.
“Now that’s different to commissioning modelling. The prime minister was asked about commissioning modelling. I sought a view.”
Chalmers said it was “normal practice” to seek advice on such a matter and that the Treasury’s view was a change to negative gearing “wouldn’t get the sort of improvement that we desperately need to see in our economy when it comes to supply”.
He said Labor was “not proposing any changes in this area”.
Shadow treasurer Angus Taylor claimed Albanese “lied” about plans to raise housing taxes during the debate.
“The prime minister last night denied his government had modelled negative gearing changes. The treasurer confirmed in September it had,” Taylor said.
“The prime minister lied to the Australian public on camera about his hidden plans to raise taxes on housing.”
Dutton argued cutting negative gearing would worsen the rental market.
“I have stated very clearly, we want a sustainable housing market, which includes rental stock,” the opposition leader when debate moderator David Speers asked why his party wouldn’t change the capital gains tax discount or negative gearing.
“If you want to cut out negative gearing, as the Labor Party and the Greens would love to do, you will stop investment taking place for properties that are ultimately rented by young Australians.”
A report released today by parliament revealed the cost of revenue forgone due to both negative gearing deductions and capital gains discounts was $11.9 billion in the 2024/25 financial year.
It’s estimated the combined cost will reach $180.5 billion over the next 10 years from 2026/27 until 2035/36.
Greens spokesperson for housing and homelessness Max Chandler-Mather said the Greens would work to abolish “massive tax handouts” for property investors.
“The Greens will right the wrongs of decades of housing failure and end the tax handouts for investors with more than one investment property that are turbocharging house prices and denying renters the chance to buy a home,” Chandler-Mather said.
“How is it fair that a young family loses at an auction to an investor buying their 10th property because that investor has massive tax handouts from the government?”
Former prime minister Malcolm Turnbull said in a post on X that negative gearing is “examined by every government”.
”It is a major tax concession and always contentious and so it is always looked at – what does it cost?” Turnbull said.
“What would particular changes mean in terms of revenue and housing affordability.”
