Property investors in focus as tax debate shifts gears

Tess Ikonomou |

Greens and independents want the Labor government to revisit tax breaks on investment properties.
Greens and independents want the Labor government to revisit tax breaks on investment properties.

Property investors are shaping as the next targets of tax reform as the prime minister feels the squeeze over negative gearing and capital gains.

Anthony Albanese isn’t the only one under the pump, with Opposition Leader Peter Dutton also copping friendly fire.

Greens and independents want the Labor government to revisit tax breaks on investment properties.

One proposal involves limiting negative gearing rules to a single investment property.

Mr Albanese has repeatedly slapped down their calls, insisting income tax cuts are the main game.

“We’ll determine our policies,” he told ABC radio.

“We have a big tax agenda on the table right now that will benefit the 13.6 million taxpayers, every single taxpayer will get a tax cut.”

Labor went to two elections promising to scrap negative gearing on properties purchased after a certain date, but the party dumped the policy in 2019 and has not revisited it.

Mr Albanese’s response has not been enough to douse the flames, given Labor broke an election commitment to leave income tax cuts unchanged.

The coalition has tried to weaponise the broken promise with a warning about what could come next, but their capitulation over the tax cuts has largely dampened the campaign.

So too has a surprise intervention from former NSW premier Dominic Perrottet, who remains widely respected in the Liberal Party.

Former NSW premier Dominic Perrottet
Negative gearing is also being questioned by Dominic Perrottet, on the Liberal side of politics. (James Gourley/AAP PHOTOS)

Mr Perrottet has called for negative gearing reforms to be put back on the table as part of a wider debate about how tax changes could address housing affordability.

The federal opposition leader responded to the suggestion on Friday morning.

“We don’t have rental stock in this country without negative gearing,” he told Nine’s Today.

“People who want to save for their family, for their kids and grandkids look at a rental property as core business and this government attacks aspiration.”

Negative gearing allows investors to claim deductions on losses, while the capital gains tax discount halves the amount of excise paid by people who sell assets that have been owned for 12 months or more.

Weeks out from a federal by-election, the Australia Institute has released polling on the income tax changes.

Its survey follows similar polls in affluent independent-held seats and National Party electorates.

Two-thirds of voters in Dunkley, located south-east of Melbourne, backed Labor’s changes to tax cuts.

The survey of 600 locals, carried out by uComms, found 28 per cent of voters opposed the revamped package.

Some 29 per cent of Liberal voters were in favour of the changes, along with 95 per cent of Labor voters, 93 per cent of Greens voters and 72 per cent of independent voters.

Residents in the electorate on Victoria’s Mornington peninsula will head to the polls on March 2.