Amid discussions about possible changes to negative gearing and capital gains tax reforms, Prime Minister Anthony Albanese has clarified that his government will not be taking these reforms into the next election, instead committing to their current housing policy.
“What we’re doing is planning for our Homes for Australia policy. That’s the policy we have, and that’s what my government is focused on,” he told ABC News on Sept. 26.
Negative gearing is an investment strategy commonly used by Australians, where the costs of owning an investment property exceed the income it generates.
Investors can claim the loss as a tax deduction, reducing their taxable income. This strategy relies on the expectation that the property’s value will appreciate over time, allowing for a profitable sale despite short-term losses.
The debate around potential changes to negative gearing reforms intensified after reports surfaced that the government had commissioned the Treasury to model possible adjustments to tax arrangements for investment properties—a policy that could impact millions of voters.
Albanese emphasised that the key to housing policy lies in increasing supply, which remains their primary objective.
“We have allocated $32 billion for the Homes for Australia plan. We want more public housing, more build-to-rent units, but that’s stuck in the Senate,” he said.
Labor has been attempting to pass two key bills—Help to Buy and Build-to-Rent—but has struggled to secure the support of the Greens and the Liberal-National Coalition.
When asked whether he believed negative gearing was equitable for all Australians, Albanese responded that investment in housing contributes to rental availability and construction.
“This is why the Build-to-Rent scheme will provide incentives through the tax system for more housing construction,” he added.
Meanwhile, Albanese defended the role of the Treasury and the public service, stating they do not need to be “directed like schoolchildren,” and that they explore various policy ideas independently.
On Sept. 25, Treasurer Jim Chalmers sidestepped questions about negative gearing, stating, “We’ve got a housing policy, and that’s not in it.”
He further clarified that it is common practice for the Treasury to seek advice on issues discussed in Parliament or the public domain.
“Our housing policy is to build more houses for Australians,” Chalmers reiterated.
He also mentioned that the government’s current tax priorities include changes to the Petroleum Resource Rent Tax (PRRT), addressing superannuation, and introducing tax incentives for build-to-rent developments.
