More than a quarter of a million renters could own their own homes if Labor revived dumped plans to wind back generous tax breaks for residential property investors, new analysis shows.
A Parliamentary Library analysis of NSW Treasury modelling and census data, commissioned by Greens MP Max Chandler-Mather, found home ownership would rise by 4.7%, or 292,902 more owner-occupier houses, if negative gearing and capital gains tax discounts were wound back.
The increase would result in 774,955 individuals currently living in residential investor properties moving to owner-occupier homes instead, the analysis showed.
Negative gearing allows investors to claim tax deductions on rental property losses, while the capital gains tax discount halves the amount of excise paid by people who sell assets that have been owned for 12 months or more.
Between 2016 and 2021, Labor in opposition promised to halve CGT discounts from 50% to 25% and to limit negative gearing to newly-built homes only.
The former Labor leader, Bill Shorten, took the policies to two federal elections, losing both, before they were ultimately ditched.
Before Labor’s loss at the polls in 2019, the now treasurer, Jim Chalmers, had described the tax tweaks in 2017 as “the most meaningful lever when it comes to dealing with housing affordability”.
But any chance of Labor reviving those levers were suddenly dashed on Thursday by the deputy prime minister, Richard Marles.
“We’re not doing negative gearing. That’s been made manifestly clear and none of that has changed,” Marles told Sky News.
Similarly, Guardian Australia was told changes to CGT discounts was also off the table.
Earlier in the week, some federal Labor MPs suggested reducing CGT discounts could help win back voters after backlash against Anthony Albanese’s decision to buy a $4.3m waterfront home on the New South Wales Central Coast in the middle of a housing crisis.
Chandler-Mather said “property investor” Albanese had become the “biggest blocker” to meaningful change on solving the housing crisis.
“These tax handouts might help property investors like the prime minister to buy up multi-million dollar mansions, but they are locking out over 770,000 renters out of home ownership by driving up prices and rigging the system in favour of banks and landlords,” he said.
“People like the prime minister and Peter Dutton had the chance to buy an affordable home in the 90s when they were young, and all the Greens are pushing for is meaningful reform that ensures the next generation gets that same chance.”
The Greens and the Albanese government have been at loggerheads over housing policy since Labor’s election, with the latest impasse occurring over two bills – the build to rent and help to buy schemes.
In September, the Greens teamed up with the Coalition to stall a vote on the help to buy bill for two months. The shared equity scheme would loan eligible applicants 30% or 40% of the purchase price of existing and new builds, respectively.
Similarly, the Greens sided with the opposition to knock back the build to rent bill in June.
Chandler-Mather said the minor party’s demands to support the bills were a compromise on negative gearing and CGT discounts.
“The Greens are ready to work with Labor to negotiate a meaningful plan to fix this broken system and help the millions of people who have otherwise given up on owning a home,” he said.
– Additional reporting by Karen Middleton
