The federal government is currently modelling reforms to Negative Gearing and Capital Gains Tax that could have a profound impact on the Australian housing landscape. In the video below, I break down the latest ATO and market data to show why these proposed changes could spook the market into a dormant state and reverse the progress we’ve made on housing supply.
Watch the Full Presentation on Negative Gearing below or join the debate on YouTube here:
Key Insights from the Presentation
If you don't have time to watch the full video right now, here are the critical takeaways for every Australian property investor:
1. Negative Gearing is an Outcome, Not a Policy
One of the biggest myths in this debate is that negative gearing is a permanent "tax dodge." The data shows it is a moment in time. As investments mature, they transition to being positively geared, meaning investors become significant net contributors to the tax system through income tax and eventual Capital Gains Tax.
2. The "Investor Exodus" is Already Happening
We are seeing a record decline in new investors. In the last 15 years, new investor participation has plummeted by over 80%.
- 2008–2013: 64,000 new investors per year.
- Today: Just 10,637 per year.
3. The Victorian Warning
Victoria serves as a case study for what happens when policy ignores investor sentiment. Since 2021, constant reform and increased land taxes have led to 24,000 fewer rental properties available and the worst quarterly building completion rates in 11 years.
4. Why Supply is the Only Solution
Sustainable price and rent growth can only be achieved through more supply. By "tapping out" private investors with a two-property cap, the government is attacking the very engine room that delivers rental accommodation.
And if you've missed it, PICA has also recently released a deep dive on the Proposed Capital Gains Tax Reforms. You can watch the video here or join the debate on our socials here >
PICA's Position: A Voice for Investors
At PICA, we advocate for policy stability. We are calling on the government to maintain current Negative Gearing settings to ensure that the tens of billions of dollars in private investment needed for our growing population remains in the market.
We need a united voice to ensure these facts are heard in Canberra.
If you aren't already a member, I invite you to join the Property Investors Council of Australia. Together, we can ensure property investors have a seat at the table and that policy settings are built on data, not political narratives.
