Greens demand negative gearing crackdown
The Greens are demanding reforms to negative gearing and capital gains tax concessions are on the table in return for supporting Labor’s key election housing commitment.
The Greens are demanding reforms to negative gearing and capital gains tax concessions are on the table in return for supporting Labor’s key election housing commitment to set up a scheme to co-invest in property with first home buyers.
Greens leader Adam Bandt said he would demand “significant changes” to housing investment rules, with the government needing the minor party to pass the “help to buy” reforms through the Senate.
The help to buy scheme, opposed by the Coalition, would see the government assist 10,000 first home buyers by taking an equity stake of up to 40 per cent in their property.
To be eligible for the scheme, buyers need a minimum 2 per cent deposit and it is limited to single people with an income of up to $90,000 and up to $120,000 for couples.
Mr Bandt said Labor’s policy was a “housing lottery” helping just 0.2 per cent of home buyers each year.
“In negotiations with the government over the help to buy legislation we’ll push Labor to end the tax handouts for big property investors, freeze rents and build public housing to help renters and first home buyers,” Mr Bandt said.
Jim Chalmers on Sunday conceded he had spoken to Treasury secretary Steven Kennedy about negative gearing and capital gains tax arrangements. But he said it did not mean the government was considering clamping down on the tax concessions.
“It’s not something that we’re considering,” the Treasurer said. “It’s not something that we’re proposing, it’s not something that we’re working up.”
Opposition Treasury spokesman Angus Taylor said the Coalition would not touch negative gearing.
He accused the government on giving “wishy washy” answers on the issue.
“We know they’re considering this. Their answers in the parliament on this, this week, were very wishy washy. They were all over the place,” Mr Taylor said.
Master Builders Australia chief executive Denita Wawn, who led the campaign against Bill Shorten’s tax crackdowns ahead of the 2019 election, warned the Albanese government to not touch negative gearing because Australia needs investors to put money into new homes.
Senior housing industry figures have told The Australian that Labor ministers have given assurances the government will not pursue negative gearing changes in the near-term.
“We know from our data … from before the 2019 election … that as soon you curtail negative gearing, you curtail the number of homes that are going to be built,” she said.
The MBA pre-budget submission released on Monday says “current incentives regarding negative gearing and the capital gains tax discount have the effect of dampening rental costs and expanding the supply of rental accommodation … they should remain in place”.
“Current arrangements around negative gearing and the CGT discount attract participation from domestic investors and should be retained in their current forms. Moves to curtail these features of the tax system would result in less accommodation being made available to the rental market,” the submission said.
“All principal private residences are currently exempt from CGT and other forms of taxation. To ensure housing stock is used optimally, this needs to remain the case.”
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