Support for changes to negative gearing

Most Australians are open to winding back tax handouts for property investors, a poll shows amid a growing rental and housing crisis.

Most Australians are open to winding back tax handouts for property investors, a poll commissioned by Everybody’s Home found. Picture: Julian Andrews

Most Australians are open to winding back tax handouts for property investors, with less than a quarter supporting the status quo, according to a new poll commissioned by Everybody’s Home.

The poll by the organisation, which is backed by a coalition of housing, homelessness and welfare organisations, comes amid a growing rental and housing crisis, which has prompted a push for changes to policy settings.

Rental affordability in Australia is now at its worst level in at least 17 years, according to research house PropTrack, as there has been a surge in rents after the pandemic, with supply failures being blamed for the problems. The RedBridge poll of more than 1500 Australian voters found 58 per cent supported limiting or abolishing negative gearing and the capital gains tax discount.

Voters who don’t own an investment property are more open to reform, with 62 per cent supportive of changes. But there is also some resistance, with one in five voters unsure about a policy switch and 22 per cent against altering policies.

The poll found nearly half of voters – 47 per cent – were in housing stress and spending at least 30 per cent of their income on housing. About 32 per cent were spending 40 per cent or more. Younger voters in the 18-34 year old bracket were hit the hardest, with half of that cohort spending 40 per cent or more of their income on housing, compared with just 9 per cent of those aged 65 and older.

Everybody’s Home spokeswoman Maiy Azize said housing stress was rife and many voters could see that investor tax handouts were unfair and made the housing crisis worse.

“Most voters support the federal government limiting or abolishing tax handouts for investors. Less than a quarter want to stick to the status quo. The appetite for change is here, and it’s happening in the absence of leadership from the major parties who are afraid to champion tax reform,” Ms Azize said.

She challenged the accepted view that Labor’s previous proposals to reform negative gearing sank its hopes in the 2019 election.

“It is political folklore and a tired trope that negative gearing cost Labor the 2019 election when there were a range of factors at play. Five years on and a worsening housing crisis later, Australian voters want reform on unfair tax breaks for investors. There is a huge opportunity for the politicians who are bold enough to take on this policy reform,” she said.

“The federal government must abolish these unfair investor handouts and use the savings to build hundreds of thousands of social homes. It’s past time our national leaders prioritised housing for all over the profits of investors,” Ms Aziz said.

Last month, Prime Minister Anthony Albanese said he was supportive of current negative gearing rules, noting their role in driving housing investment, and said the government had not considered changes.

However, the debate flared this month when the Greens unveiled an ambitious plan to build hundreds of thousands of affordable new homes. That plan promised to scrap tax handouts and invest billions of dollars for a public property developer to build homes aimed at current renters and first-home buyers.

Property Council chief executive Mike Zorbas responded this month, saying that negative gearing acted to support new supply and enable upkeep of existing supply, in an address to the National Press Club.