Media Release: Tuesday 12 th May 2026
FOR IMMEDIATE RELEASE
The Property Investors Council of Australia (PICA) has criticised the Federal Government’s decision to proceed with changes to Negative Gearing and Capital Gains Tax (CGT), warning the reforms risk reducing rental supply, increasing rents and destabilising regional property markets.
PICA Chair Ben Kingsley said the Government’s position contradicted its long-held argument that Australia’s housing challenges were fundamentally a supply issue.
“If the property market is ‘broken’ as the Government is now claiming, then Labor should have known this during its first term of Government and should have been upfront and honest with the Australian people before seeking a second term,” Mr Kingsley said.
“For years the message from Government has been that housing affordability was primarily a supply issue. Disguising these revenue raising tax increases as a housing affordability solution simply doesn’t pass the pub test — particularly when these policies actively discourage investment into broader rental supply.”
Capital Gains Tax Changes
PICA said it had previously supported sensible reforms to Capital Gains Tax arrangements, particularly reforms designed to discourage short-term speculation and property trading activity, whilst encouraging long term investment for adequate and broad rental supply.
“Back in 2019, PICA was open to reforms to Capital Gains Tax,” Mr Kingsley said.
“But the reforms we supported were targeted at speculative trading activity — the rapid buying and selling of property that can inflate prices, particularly in regional markets.”
PICA said a more balanced approach would have focused on penalising short-term property trading, while maintaining strong incentives for long-term buy-and-hold investment that supports rental supply.
“A better model would have been one that discouraged speculative flipping, while still recognising the important role long-term investors play in funding and supplying rental accommodation,” Mr Kingsley said.
While acknowledging the proposed policy may reduce speculative behaviour, PICA warned the higher tax burden investors would ultimately face when selling investment properties would discourage many Australians from investing in the first place.
Regional Market Risks
PICA also expressed serious concerns about the proposed transition arrangements allowing investors access to the existing 50 per cent CGT discount until July next year.
According to PICA, regional property markets are particularly vulnerable due to their relatively shallow market depth.
“Many regional markets have enjoyed strong price growth in recent years, but these markets also have very shallow market depth,” Mr Kingsley said.
“At any given point in time, relatively small shifts in buyer demand or seller supply can have an outsized impact on prices.”
PICA warned the transition window could trigger a rush of investors seeking to crystallise recent strong gains before the policy changes take effect.
“There is a genuine risk that many investors decide to cash in their gains at the same time, only to discover that everyone else has had the same idea,” Mr Kingsley said.
“If this occurs against a backdrop of higher inflation, elevated interest rates, a slowing regional economy and weaker investor demand due to the removal of negative gearing benefits, the downside risks become very real.”
“There is a material risk of wiping out billions of dollars of value off tens of thousands of homeowners and investors properties in these regional markets. That is a significant unintended consequence no government will want to happen on their watch if it materialises.”
Negative Gearing Changes
PICA said the Government’s decision to limit Negative Gearing concessions to newly built properties would create long-term distortions across the rental market.
“This policy should have been left alone,” Mr Kingsley said.
“Australia’s rental market needs broad-based supply of existing and new across all housing types and locations to support workforce mobility, family needs and broader economic productivity.”
PICA argued restricting incentives to new builds would progressively reduce rental availability in established middle-ring suburbs, where many renters seek accommodation close to employment, schools, transport and community infrastructure.
“By limiting negative gearing to new builds only, the Government is effectively signalling that future renters should either live in high-density apartments or on the outer fringes of our cities.”
“Middle suburbia risks being hollowed out of rental stock over time, and the limited supply that remains will inevitably attract a rental premium.”
Call for Industry Consultation
PICA said the Government had missed an opportunity to work collaboratively with industry on more sustainable housing solutions.
“If the Government was genuine about fixing the property market, it would have engaged more deeply with industry participants to explore practical, long-term solutions instead of relying on tax increases to raise revenue,” Mr Kingsley said.
“Higher taxes and fewer rental properties will ultimately lead to higher rents. That outcome will hurt the very Australians these policies are supposedly designed to help.”
ENDS.
About PICA
For a further information or to arrange an interview with Ben Kingsley – please call Ben Kingsley on 0403 795 252 or email bkingsley@pica.asn.au
The Property Investors Council of Australia (PICA) is a national, not-for-profit association representing the interests of more than 2.3 million individual property investors. PICA’s mission is to advocate for a sustainable and responsible property investment sector that supports long-term financial security for Australians, while also contributing positively to the broader economy, housing system and rental market.
