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The Australian Greens party has announced their intention on demanding “significant changes” to negative gearing and the capital gains tax (CGT) discount ahead of negotiations on the Albanese government’s Help to Buy Bill.
Currently before the Parliament, the Help to Buy Bill establishes a Commonwealth-shared equity scheme set to be administered by Housing Australia in order to help low-to-middle income earners buy new or existing homes.
However, the Greens have suggested that the Labor Party’s “housing lottery” will push up house prices while failing to help “99.8 per cent of eligible renters and first home buyers”.
According to the Greens, the Help to Buy scheme would only support a capped 0.2 per cent of eligible home buyers per year.
As such, the Greens have called on the Albanese government to limit negative gearing and CGT handouts and redirect the “saved revenue to public housing” in order for them to support the scheme.
Reportedly, tax handouts for property investors – which include negative gearing and CGT discounts – is set to cost the budget $39 billion in forgone revenue, the Greens stated.
Leader of the Australian Greens, Adam Bandt MP, said the “system is stacked against renters and first home buyers, and Labor’s answer is a housing lottery for a lucky few and higher rents and house prices for everyone else”.
Adding to this, Greens spokesperson for housing and homelessness, Max Chandler-Mather, said: “Pressure works. Labor changed their position on stage three tax cuts and now they need to change their position on negative gearing and capital gains tax.”
“Property prices and rents are growing way faster than wages, putting home ownership even further out of reach for millions of people, and we can’t fix this until the government stops handing out billions of dollars in tax concessions to big property investors.
In response, Master Builders Australia chief executive, Denita Wawn, took the opportunity to explain why proposed changes to negative gearing had been rejected in the past.
“Prior to the 2019 election, Master Builders had modelled ALP policies to change negative gearing and capital gains tax arrangements.
“The policies would have seen a fall in the number of homes being built, thousands of job losses and billions of dollars wiped off the value of residential building activity.
“Fast forward to 2024 and we’re now in an even worse economic and housing environment with renters and mortgage holders bearing the brunt of rapid interest rate rises and high inflation,” Ms Wawn said.
According to Ms Wawn, the common constraint across the whole housing spectrum is supply, thus more homes need to be built to put downward pressure on housing inflation and rents.
“The Henry Tax Review, Productivity Commission and Reserve Bank of Australia have all said curtailing investor incentives like negative gearing and capital gains tax discounts reduces housing supply rather than improve it.
“With the current downturn in new building approvals and investments in new housing, why we would take a sledgehammer to investors including mums and dads beggars’ belief?” she said.
Ms Wawn added that the federal government should prioritise the objectives of the housing accord and ensure the target of 1.2 million homes is achieved by reducing the cost and time it takes to build, boosting the construction workforce and investing in “critical infrastructure to make land ‘build ready’”.
[RELATED: Government urged to scrap property investor tax concessions]
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