Restricting negative gearing and scrapping the capital gains tax discount would make housing more affordable and increase home ownership rates, the Australia Institute has said in a recent submission.
Key Findings:
A major cause of rising house prices has been increased demand from investors.
- Restricting negative gearing to newly built housing and scrapping the capital gains tax discount would reduce speculation in the housing market and allow more first home buyers to get into their own home.
- Reducing tax concessions would also raise billions of dollars of revenue that can be used to build more housing.
- Negative gearing and the CGT discount cost the budget around $20 billion per year, more than twice the $8.4 billion state and territory governments spent on public and community housing in 2022-23.
- Macroprudential policies such as restricting finance for investment properties would also slow housing price growth.
- Increasing housing supply is not the only solution. Over the last 10 years, the supply of housing has increased faster than the population, but house prices have still increased 75%.
“The Labor Government is right to look at options to reduce tax concessions for property investors,” said Matt Grudnoff, Senior Economist at the Australia Institute.



