As a swinging voter who has voted Labor and Liberal, Punjabi said any proposed changes to negative gearing would be a factor in his vote at the next federal election. Votes like his could well make a difference in the looming election.
He lives in the extremely marginal seat of Deakin in Melbourne’s east, where the Liberal Party’s Michael Sukkar won with a margin of just 0.2 per cent at the last election.
Prime Minister Anthony Albanese has been asked several times about changes to negative gearing.Credit: Alex Ellinghausen
“We have such a shortage of housing stock in Australia, and if you are going to discourage investment, it’s not going to help anyone,” he said. “It’s just going to put rentals up in the long run.”
Figures from the Parliamentary Library, commissioned by independent senator David Pocock and based on statistics from the Australian Taxation Office (ATO) show more than 120,000 voters in the 20 most marginal federal seats are taking advantage of the tax concessions.
According to the ATO, about 2.2 million people were landlords in Australia in 2021, and about half of those made a loss on that investment, which meant they were negatively geared.
Another landlord, Tony McCoy, said any changes to negative gearing would also hurt his retirement plan, which had involved moving money from his superannuation fund into property.
“We now have [Victorian] Labor massively increasing land taxes and federal Labor looking at changing the rules to our detriment, right as we are looking at retirement,” he said.
Purnell Real Estate principal Nick Purnell, who bought an apartment in the Canberra suburb of Kingston as an investment property in 2020, said people would stop investing in property if negative gearing was abolished.
“At this stage, and in this market, negative gearing is entirely necessary in the Australian Capital Territory,” he said, noting rents in Canberra often fall short of the combined cost of mortgage repayments, land tax and general rates.
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“Without property investors in the market, there won’t be enough stock of rental properties, and you’ll see a massive increase in rent because the people who do have properties will be looking to positively gear them, and other people won’t be buying them.”
Of the 400 properties his agency manages, Purnell said only about 5 to 10 per cent were positively geared.
There is “no way” rents will ever outperform the increase in rates and land tax, Purnell said, and without negative gearing, he would have considered cheaper properties in more regional areas.
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