Community and housing organisations have intensified their calls for Australian MPs to support significant reforms to negative gearing and capital gains tax, arguing the current system fuels the housing crisis and locks out first-time buyers.
Growing Pressure on Parliament
More than 20 community groups, including the Australian Council of Social Service (ACOSS) and National Shelter, have written to all federal MPs urging them to back changes that would limit tax concessions for property investors. The groups argue that the existing tax breaks disproportionately benefit wealthy investors and drive up house prices, making homeownership unattainable for many Australians.
The push comes as the government considers potential housing policy adjustments ahead of the next election. The coalition of organisations is calling for a reduction in the capital gains tax discount from 50% to 25% and a cap on negative gearing to new housing only. They claim these measures could save the budget billions of dollars while making housing more affordable.
Impact on Housing Affordability
According to the groups, the current tax settings cost the federal budget around $10 billion annually in forgone revenue. They argue that redirecting these funds could support the construction of more social and affordable housing. The letter states: "The current tax concessions are a key driver of housing inequality. They inflate prices, reduce supply for owner-occupiers, and exacerbate the rental crisis."
The organisations emphasize that the reforms would not affect the majority of Australians who do not own investment properties. They also highlight that similar changes in New Zealand and the United Kingdom have helped cool housing markets without causing significant economic disruption.
Political Divides
The proposal has drawn mixed reactions from political parties. The Labor government has signaled some willingness to consider tweaks but has ruled out major changes before the next election. The Greens have long advocated for ending negative gearing and halving the capital gains tax discount. Meanwhile, the Coalition has opposed any changes, warning they could hurt mum-and-dad investors and lead to higher rents.
The community groups are urging MPs to put housing affordability ahead of political interests. They warn that without decisive action, the housing crisis will deepen, with more Australians forced into insecure housing or homelessness.
Call for Immediate Action
The letter concludes with a call for politicians to act now: "Every day of delay means more Australians are locked out of the housing market. We urge all MPs to support these sensible reforms that will make housing more affordable and fairer for everyone."
As the debate continues, housing advocates plan to ramp up public campaigns in key electorates to pressure MPs to back the proposed changes.
