The Labor Party's proposed changes to negative gearing would create a two-tier property market that would hurt existing investors, and prices, when it came time to sell, consultancy Riskwise says.

While Labor's plans to "grandfather" the tax incentive would allow investors to continue to deduct net rental losses against their income for newly constructed housing, investors who own or buy new property to negatively gear would lose out when they went to sell their second-hand properties, which would no longer qualify for the same tax benefits, RiskWise chief executive Doron Peleg said.