As Labor’s Help to Buy legislation comes back to the Senate this week, new budget analysis completed by the Parliamentary Budget Office for the Greens has found that negative gearing and the capital gains tax discount for residential property investors will cost the Federal Budget $165 billion over the decade in forgone revenue, from 2024/25 to 2033/34.
Of that 67% will go to the top 20% of income earners. With the bottom 50% of earners only receiving only 14% of the benefit.
The Capital Gains Tax Discount alone would see 83% of the benefit go to the top 20% of income earners and only 7% going to the bottom 50% of earners.
Meanwhile, ABS Lending Indicators show that 79% of all investor finance from April 2023- April 2024 went toward the purchase of existing dwellings.
The Greens have said that they will pass Labor’s Help to Buy legislation if Labor agrees to move on phasing out negative gearing and the capital gains tax discount.
Budget analysis available on request.
Lines attributable to Max Chandler-Mather, Australian Greens spokesperson for housing and homelessness:
We’ve got a property investor Prime Minister trying to ram through a bill that will drive up house prices, while refusing to scrap the massive tax handouts for property investors that are denying millions of renters the chance to buy a home.
Every day Labor refuses to phase out these unfair tax handouts is another day that a potential first home buyer gets screwed over at an auction by a property investor.
These tax handouts are $165 billion worth of fuel that Labor is pouring on the raging fire that is Australia’s housing crisis, and until Labor scraps them, we’ll never get it under control.
“What these massive numbers represent is a generational and class war that Labor and the Liberals are waging on young people and renters, making the rich richer, while everyone else’s life gets harder.
“All published polling now says a majority of Australians want to phase out negative gearing and the capital gains tax discount, so why does Labor keep choosing wealthy property investors over millions of renters?
It is frankly extraordinary that 75% of Labor’s caucus are property investors, but at the same time they refuse to make any changes to generous tax handouts their government gives property investors. That is a massive and clear conflict of interest.
This week Labor has a chance to work with the Greens to phase out these unfair tax handouts, and finally give an entire generation some hope that they might one day be able to buy a home.
