Prominent auctioneer Tom Panos has issued a stark warning about potential federal government changes to capital gains tax rules, arguing that reducing the current 50 per cent discount could have severe unintended consequences for Australia's housing market and rental sector.
Unintended Consequences for Housing Market
Mr Panos expressed serious concerns about speculation that Treasurer Jim Chalmers may halve the capital gains tax discount to 25 per cent in the upcoming May budget. The current system, established by the Howard government in 1999, allows investors who hold assets like investment properties or shares for more than twelve months to pay tax on only half of the profit when they sell.
'I'm absolutely gobsmacked because people don't understand what's about to happen... the fabric of real estate in Australia is on the verge of being changed forever,' Mr Panos stated emphatically.
Rental Market Impacts and Reduced Turnover
The auctioneer predicted that reducing the capital gains tax discount would lead directly to higher rents across Australia. 'Rents will go up as there will be less rental properties,' he explained. 'After you sell, as an investor, you will make less money because a smaller discount will mean more of the gain is taxable.'
This financial disincentive would likely cause property investors to delay selling their assets, creating a chain reaction throughout the housing ecosystem. 'So what people are going to do is delay selling, they'll hold on to the property, which is going to reduce turnover, reduce listings which is then going to reduce the amount of money the government makes out of stamp duty,' Mr Panos detailed.
Broader Economic Implications
While Mr Panos doubted the policy would trigger a full housing market crash, he anticipated a slight dip in house prices if implemented. However, his concerns extended beyond immediate property values to fundamental questions about which assets would be affected.
'The government don't understand one simple concept - your average investor is not rich, your average investor owns one property, they are not people that are going from property to property, collecting rents, living it up,' he argued, questioning whether the changes would target only property or extend to other assets like cryptocurrency and shares.
Alternative Solutions to Housing Crisis
Mr Panos criticized what he sees as an overreliance on tax policy to address housing affordability issues. 'They're using one lever - tax - to actually try and help the housing problem when they should be looking at migration and making sure its aligned to the amount of properties that are being built,' he stated.
The auctioneer pointed to migration policy and construction capacity as more effective areas for government intervention. 'The speed of migration is higher than the speed of properties being built... and while you're migrating people in, why don't you bring in some proper tradespeople because that may bring labour costs down.'
Political Context and Scrutiny
Mr Panos also directed criticism toward the political landscape surrounding the potential policy change. 'This is all happening for no other reason except we've got a Liberal party that's in absolute chaos and mess,' he claimed. 'I just can't believe we have no one standing up.'
He accused the Coalition of enabling Labor to pursue capital gains tax changes without adequate parliamentary scrutiny or public debate about the broader economic implications.
The auctioneer's warnings come as the federal government prepares its May budget amid ongoing housing affordability challenges and rental market pressures across Australian cities and regional areas.
