Parliamentary Budget Office analysis, commissioned by the Greens and to be released today, has shed light on the extent to which negative gearing and the capital gains tax (CGT) discount for residential property inordinately favour the wealthy.

The analysis shows that for the 2024/25 financial year:

• The top 10% of income earners will reap a staggering 80% of the benefits of the CGT discount ($4.3 billion) for residential property
• A meagre 6% of the benefits of the CGT discount ($324 million) will flow through to the bottom 50% of income earners
• The top 10% of income earners will reap 43% of the benefits of negative gearing  ($2.94 billion) for residential property
• Just 15% of the benefits of the negative gearing ($994 million) will flow through to the bottom 50% of income earners

These figures show that negative gearing and the CGT discount overwhelmingly serve to make the rich richer at the expense of renters and first home buyers, putting billions of dollars in the pockets of the wealthiest property speculators every year. These cashed up property speculators go to auctions and bid up the price of housing, putting the dream of owning a home out of reach for renters and first home buyers.

The extent of unfairness revealed by this data adds to the pressure on Labor to act, following reports yesterday that the party was actively considering changes to negative gearing and the CGT discount. Pressure is mounting on Labor to act, with  a number of Labor MPs expressing desire for change, and the Prime Minister refusing to rule the matter out. Meanwhile, even Peter Dutton is facing growing pressure within the Coalition  to consider property tax changes.

The Greens have long called for significant changes to negative gearing and the CGT discount. At the 2022 election the Greens called for scrapping negative gearing going forward, while grandfathering the tax concession for those with 1 existing property , and for the CGT discount to be scrapped and replaced with indexation.

The Greens are urging Labor to come to the negotiating table, and wind back negative gearing and CGT discounts as part of passing the government’s weak and broken housing bill that will at best only help 0.2% of renters while pushing up prices for everyone else.

Lines attributable to Max Chandler-Mather MP, Greens spokesperson for Housing and Homelessness:

“Labor is giving a handful of the wealthiest property investors billions of dollars in tax handouts every year, and millions of renters and first home buyers are paying the price.

“These brutally unfair tax handouts turbocharge house prices and inequality, while denying millions of renters and first home buyers the chance to buy a home.”

“Labor will have to make a choice. Do they represent the property investor who owns 100 houses or do they stand with the young teacher or nurse who has given up on owning a home because negative gearing and capital gains discounts have stacked the deck in favour of the wealthy.”

"A majority of Australians back the Greens' call for action on negative gearing and the CGT discount, as do an increasing number of politicians from across the political spectrum. The Prime Minister needs to read the writing on the wall, rise to the occasion and take the bold action needed to solve the housing crisis.

“Labor should come to the negotiating table. The Greens are ready to work with Labor to help millions of people who would otherwise have given up on owning a home.

“It's simply not possible to fix the housing crisis while maintaining these ludicrously unfair tax handouts.

“The Prime Minister has the chance to give millions of Australians the life changing opportunity to buy a home, all he has to do is stop giving property speculators billions of dollars in tax handouts that allow them to outbid first home buyers and turbocharge prices.”