Albanese rules out negative gearing changes
Anthony Albanese repeatedly said his government has "no plans" to touch negative gearing. Photo: AAP
Prime Minister Anthony Albanese has ruled out changes to negative gearing, saying tinkering with the tax concession could harm housing supply.
Negative gearing allows investors to write off their property losses against other income, reducing their overall tax bill.
Treasury is reportedly modelling the impact of policy changes, but Albanese was more definite on Thursday when asked if Labor would include negative gearing reform in a tax package for the upcoming federal election.
“No, we’re not,” he told ABC TV.
Changes could include capping how many properties can be negatively geared or scrapping it completely while grandfathering it (meaning arrangements won’t change for those who already use it).
Limiting it to new builds is another suggestion. Supporters say the idea would likely encourage investment in new homes to boost housing supply and, in turn, put downward pressure on rents.
But Albanese said he couldn’t see the positives in negative gearing changes, with experts warning it would sap investment from the sector and not increase supply – which remained his government’s focus.
“The problem is all of the analysis shows that a change to negative gearing will not assist supply,” he told Sky News.
The opposition has ruled out any changes to negative gearing, with housing spokesman Michael Sukkar and shadow treasurer Angus Taylor talking down the effectiveness of the idea.
Sukkar said housing was taxed enough. He also ruled out supporting a cap on how many houses the concession could apply to.
The majority of people who negatively geared property had only a single investment, he said.
“We support the current arrangements that Australian mums and dads rely on as a normal feature of the tax system,” he told Sky News.
“If someone is able to negatively gear their share portfolio, a mum or dad should not be denied the same opportunity with owning an investment property.”
Taylor added: “I don’t know how taxing mum and dad investors more is going to increase supply”.
Opposition Leader Peter Dutton lambasted the thought of any change to negative gearing.
“The Prime Minister keeps changing his story about whether the government is adopting the Greens policy to abolish negative gearing or to cap it,” he said in Perth.
“We will take a very strong stance against any changes to negative gearing, because it will disrupt the housing market, it will drive up rents, and it’s not in our nation’s best interest.”
Dutton said the Coalition would not consider taking any changes to negative or capital gains taxes into the next election.
He has already geared up a scare campaign on the property tax scheme, which follows the Coalition smashing then Labor leader Bill Shorten for taking a similar policy to the 2019 election.
This week’s speculation has provided tinder for a favourite Coalition slogan that is already being wheeled out on social media: “When Labor runs out of money, they come after yours”.
Meanwhile, former Liberal treasurer Joe Hockey used an appearance at the National Press Club to weigh in on the speculation. He said any changes could spill over to rents.
“If you’re going to tinker with negative gearing, don’t look first at the housing stock, look at the impact on rents, because landlords who are struggling to pay the interest on a loan against a property will increase the rents,” he said.
“We’re running short on workers. We’ve got big inflation in building. You’ve got massive red tape, green tape, why would you build in Australia? So you’ve got to have the tax system help you along that way.”
The Greens have urged the government to alter negative gearing in exchange for their backing of Labor’s housing measures in Parliament, where they have been stalled in the Senate.
The government’s housing plan would allow for first-home buyers with smaller deposits to still buy properties.
Greens housing spokesman Max Chandler-Mather said negative gearing drove up rental prices by favouring wealthy landlords, which also increased the cost of housing and locked first-home buyers out of the market.
-AAP