Housing advocates are urging MPs to ignore 'fearmongering' and support Labor's proposed changes to negative gearing and capital gains tax, calling the reforms 'long overdue' as Australia grapples with a deepening housing crisis.
The Guardian reports that community organizations are mounting pressure on crossbench MPs and moderate Liberals to support the legislation, arguing that decades of tax policy favoring property investors have priced an entire generation out of homeownership.
Labor's finally taking on negative gearing—the policy sacred cow that's dominated Australian housing debate since the 1980s. This is the reform they tried and failed to sell in 2019. Will it work this time?
The proposed changes would limit negative gearing to new builds only, preventing investors from claiming tax deductions on losses from existing properties. The capital gains tax discount for investment properties would also be reduced. The goal: redirect investor capital toward new housing construction rather than bidding up prices on existing homes.
Opponents are already running the same playbook from 2019—claims that rents will skyrocket, that investors will flee the market, that the changes amount to class warfare. Housing advocates say that's fearmongering unsupported by evidence.
The economic research suggests the rent impact would be minimal—maybe a dollar or two per week—and that the reforms would primarily affect high-income earners using property tax breaks to reduce their tax bills.
For Australia's housing crisis, this represents Labor's most significant intervention yet. But the political risk is enormous. The property lobby is powerful, voters are sensitive to anything affecting house prices, and the opposition will hammer the government relentlessly.
Whether crossbenchers support the legislation could determine not just housing policy but Anthony Albanese's government's legacy. This is the sort of reform that defines whether a government was willing to tackle hard problems or played it safe.
