‘Act on tax and housing’: 59 per cent of voters back case for change

A clear majority of voters back the case for tax reform that can help young Australians buy their first homes, with 59 per cent in favour of using stamp duty exemptions to make housing more affordable.

An exclusive survey also shows that 40 per cent of voters want changes to negative gearing on investment properties as one option to scale back tax concessions, while 26 per cent oppose the idea and the rest are unsure.

The findings come as the Greens call for an end to “tax handouts” for big property investors, while the Grattan Institute and other policy advocates name negative gearing as a good target for reform that could recoup tax revenue and help new home buyers.

Prime Minister Anthony Albanese has rebuffed calls to overhaul tax breaks on investment properties and Labor backbenchers have repeatedly declared there are no plans to make any changes, while Opposition Leader Peter Dutton has ruled out the idea.

The Resolve Political Monitor, conducted for this masthead by research company Resolve Strategic, shows there is only minority support for changes to negative gearing and a related change to capital gains tax, which has a “discount” for investors when they sell their properties.

While 36 per cent of voters support a reduction in tax concessions on capital gains, another 24 per cent oppose the idea and 39 per cent are undecided.

“Support for changing negative gearing is in the minority, and has steadily dropped since we first asked the question in 2022,” Resolve director Jim Reed said.

“This seems at odds with the growing housing affordability issue, but we find those people with investment properties are becoming more and more nervous about the prospect of change here. They’ve been hit by cost-of-living increases and interest rates, too.”

The option with the strongest popular support is tax reform that helps first-home buyers with options such as an exemption from stamp duty, favoured by 59 per cent of voters. Only 16 per cent oppose this option, while 26 per cent are undecided.

All states offer limited exemptions from stamp duty, with NSW allowing full exemptions on properties under $800,000 for first-home buyers and a concession on properties that cost from $800,000 to $1 million.

In Victoria, first-home buyers can claim a one-off exemption from stamp duty for a home with a value up to $600,000, with other concessions and grants available.

Queensland, Western Australia, South Australia, Tasmania and the ACT also offer a range of concessions, depending on the value of the home. Any national reform would require a uniform approach from state governments under national cabinet.

Senate independent David Pocock earlier this month called for changes to negative gearing to be on the agenda to address the housing crisis, while fellow independent Jacqui Lambie expressed frustration with people owning multiple investment properties.

“Fair dinkum. I understand you want investment and not just your super, but how many houses do you need to invest [in]?” Lambie said.

One of the most controversial ideas at the 2019 federal election, when Labor proposed new curbs on franking credits on share dividends, is opposed by 29 per cent and supported by 28 per cent of voters, with 43 per cent undecided.

There is stronger support for changing the taxation of family trusts, with 39 per cent in favour of scaling back tax concessions for these financial structures. Another 22 per cent oppose changes to family trusts and 39 per cent are undecided.

Treasury revealed in January that about 1.7 million people reported almost $60 billion in net income from trusts in the 2021 financial year, equivalent to 11 per cent of all taxpayers lodging a tax return. Of the total trust income reported by individuals, Treasury said, 39 per cent was from individuals with taxable incomes greater than $200,000 a year.

Australians have backed the government’s changes to the stage 3 personal tax cuts by a slim majority – 52 per cent in favour – but many do not appear to know that the new plan delivers tax cuts to 13.6 million taxpayers from July 1.

Asked if they would benefit from the changes, 25 per cent of respondents said they would be better off but 20 per cent said they would be worse off, while 55 per cent said there was no change or they were unsure.

When asked if they thought it was right to scale back the tax cuts for workers earning more than $146,400 a year, 37 per cent said the threshold was about right, while 17 per cent thought it was too high and 14 per cent said it was too low. Another 31 per cent were undecided.

“There is majority support for Labor’s income tax changes, which is an improvement on the previous settings, and most don’t regard this as a broken promise, or at least one worth getting excited about,” Reed said.

“But only a quarter of voters think they will be better off as a result of these tax cuts. This is not surprising when you consider the size of the cost-of-living increases and bracket creep they are seeking to overcome.

“This is why it seems to have passed most people by. It doesn’t figure highly in the comments submitted in our survey, and hasn’t moved Labor’s vote or any of their financial performance ratings.”

Treasury revealed in January that rental property deductions cost the federal government $24 billion last year.

About 1.1 million people, or half the total number of people with rental deductions, had a rental loss during the year, which is the definition of negative gearing. These losses added up to $7.8 billion and provided a tax benefit of $2.7 billion to those taxpayers.

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