We need to abolish negative gearing and we need to push for it NOW.
Housing affordability is unattainable unless we get rid of negative gearing. More supply won't matter if negative gearing continues to drive up prices and encourage investors to snap up all the affordable homes.
Pressure on this issue is building up in the Labor Party. Every three years they have a national conference where members debate and hash out policy. July 2026 is the next one so we won't have another before the next election.
So you need to contact your Labor MP AND your Labor Senators (there will be multiple) and tell them you want them to abolish/phase out negative gearing NOW.
Send multiple emails. Get others to do so too. Send one every month BEFORE July this year!
This is our chance to fight for this issue before they resolve to ignore our pleas for the next 3 years. So let's make noise while we can.
What is negative gearing?
Basically it's a tax break for investors. If you own a house, but the cost of maintaining that house is more than the return on investment then you deduct the difference from your taxable income. (Basically if mortgage is more than the rent then the difference is a tax break). It encourages investors to buy all the cheaper houses because it makes investment really appealing, which then creates a shortage of supply for people who want to own a home and subsequently drives up housing prices.
It benefits the rich who can buy multiple houses. It directly makes your hopes of owning a home less and less possible. It doesn't encourage new homes to be built. It doesn't help anyone but those who own multiple homes. Proponents of keeping it say it keeps rents down but that's not supported by data. In fact, it was temporarily removed in the 80s under Hawke and rents didn't go up except in Perth and Sydney, which had other factors driving those rents up. So it's bullshit to claim that giving billions to rich people will stop them from hiking rents another $250pw at their next opportunity.
So it literally just benefits rich people - not you. Tell Labor to abolish it NOW.
We should also get rid of the capital gains tax discount.
When someone sells a house that's gone up in value they get taxed on that profit (capital gains). However, Howard ALSO introduced a discount of 50% in the 90s so if you sell a house at $200,000 profit, you only get taxed for $100,000 of that.
Once again, this makes buying and selling houses for a profit more appealing to investors who decrease supply for home owners. They can use their investment properties as leverage to borrow more than someone trying to buy their first home so can pay more and drive up prices further.
It means that since the late 90s, housing prices have skyrocketed well ahead of wages:
Wage growth isn't the answer to the housing crisis. It cannot possibly catch up to what negative gearing and the capital gains tax discount continue to do to housing prices.
Combined, these tax breaks for the rich cost us BILLIONS.
These tax breaks encourage investors to buy more properties, which makes housing less affordable.
Those investors then drive up rent on us so we're paying to subsidise their 2nd, 5th, or even 27th mortgage.
If the rent doesn't cover all the costs of their mortage then OUR taxes pay to give THEM a tax break on their income.
Tens of billions a YEAR are spent subsidising investors who are profiting off your inability to EVER own a home.
Labor needs to care more about regular people than millionaires and the only way they demonstrate that is by getting rid of negative gearing/the capital gains tax discount.
What can we do about it? CONTACT LABOR AND DEMAND ACTION NOW.
Contact Labor Senators and members. DEMAND that they abolish negative gearing and the capital gains tax discount. Get others to demand the same as well.
Their national conference is THIS July. If we can pressure enough Labor MPs before July they can change the party's policy.
But we need to push hard NOW.
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