Do not tamper with negative gearing, peak body warns
The peak body for Australia's property industry has warned against the Greens’ pledge to abolish negative gearing if they gain power, highlighting that it would “lower the supply of new homes”.
Ahead of the 2025 federal election on 3 May, the Property Council of Australia (PCA) has warned that changes to negative gearing settings will not assist Australia in meeting its national housing targets.
Yesterday, 9 April 2025, the Greens pledged to end Australia’s “ unfair tax breaks”, such as negative gearing and the 50 per cent capital gains tax (CGT) discount, if the party gains power in a minority government following the federal election.
The Greens said they would aim to grandfather negative gearing and the 50 per cent capital gain tax discount to one investment property (purchased before the policy commences) and scrap the 50 per cent CGT discount for all other assets.
The party said these concessions would not be available for investment properties purchased after the policy commences or for second and subsequent investment properties that are already owned.
Greens housing spokesperson, Max Chandler-Mather, said that property investment incentives have “turbocharged prices, making it easier for an investor to buy their 10th property than it is for someone to buy their first home”.
Although the Labor government confirmed last September that it was exploring options to reduce negative gearing and capital gains tax, The Guardian reported that the party dismissed the possibility of any changes to negative gearing.
When Labor’s Minister for Industry and Science, Ed Husic, was asked if his party would change negative gearing policies, he confirmed that it would not, adding: “That’s the end of the story.”
Today (10 April), Opposition Leader Peter Dutton slammed the Greens’ promise to eliminate negative gearing, stating that it constitutes a significant asset class for Australians approaching retirement or those with retirement plans relying on rental incomes.
Dutton further noted that changing negative gearing settings would mean “high rents” and introduce more pressure on the housing market.
The PCA also raised concerns about the Greens’ election pledge, warning that changes to negative gearing settings will not assist Australia in achieving its national housing targets.
Property Council CEO, Mike Zorbas, said that changes to negative gearing were a “distraction” from supply-side policies, such as planning, zoning and last-mile infrastructure reforms, that “genuinely tackle the housing crisis”.
A recent study from the council predicted that Australia would fall 462,000 homes behind the national housing target of 1.2 million new houses by 2029.
Zorbas said the only solution to supply shortages is to “build more homes”.
The Property Council said that government taxes and charges account for over 30 per cent of the cost of a new home, noting that future changes to Australia’s tax settings will need to be part of broader reforms that will boost the economy’s efficiency while increasing supply.
“Tampering with negative gearing will only lower the supply of new homes.”
“Over the next 12 months, individuals and institutions will be looking for leaders who give them the greatest possible certainty of investment in new supply,” he concluded.