Union calls for end to tax breaks that make Australian housing ‘a vehicle for hoarding wealth’ | Housing
A union has called for sweeping changes to housing tax breaks, warning they “commodify” property and worsen inequality.
Australian Manufacturing Workers Union (AMWU) wants the capital gains deduction for investment properties to be phased out and the adverse effects effectively removed.
It also proposes that the federal government replace the 5 per cent housing deposit program with a scheme that would allow tenants to allocate some of their rent towards purchasing property.
The pro-Labor union is among many stakeholders calling for sweeping changes to house tax cuts in submissions to the Greens-led Senate inquiry into the John Howard-era 50% capital gains tax cut.
The Australian Nursing and Midwifery Federation has also recommended removing the discount, which it fears will “exacerbate inequality, worsen housing affordability and undermine Australia’s long-term social and economic prosperity”.
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In 2016 and again in 2019, the Labor opposition led by Bill Shorten proposed cutting capital gains tax concessions and restricting negative gearing. But the Albanian government has repeatedly rejected calls to revive some version of the plans, arguing that policies to increase supply are the best way to deal with the housing crisis.
The Treasury modeled changes to concessions in 2024, but the government chose not to proceed with them ahead of last year’s federal election.
In its submission to the inquiry, the AMWU said the country needed to “reframe” the housing debate.
“The commodification of homes and their transformation into means of accumulating and hoarding wealth has further increased inequality and allowed property developers, real estate agents and investors to profit by denying working people the dignity of homeownership,” the presentation said.
The AMWU recommended that the capital gains deduction on investment properties be reduced immediately and phased out completely over a two-year period.
If a property is sold after at least 12 months of ownership, the discount applied is expected to cost the federal budget $21.8 billion in revenue foregone in 2025-26According to Treasury figures published in December.
The union wants to stop investors using their losses to reduce their income tax bills, effectively ending the negative impact on properties.
He argued that the revenue recouped by the end of concessions should be directed to developing Australia’s modular housing sector.
“The economic and social opportunity of homeownership is becoming inaccessible for most workers. In fact, without significant and real changes in our mentality and policy, an entire generation will miss this opportunity,” the application said.
AMWU’s position goes further than this Australian Council of Trade Unions (ACTU) The proposal, submitted to last year’s productivity roundtable, called for negative guidance and capital gains tax breaks to be limited to a single investment property and rolled over for five years.
The greens are gone too federal election A policy to limit adverse impacts and a 50% capital gains tax deduction for an investment property that will also be transferred.
Pressure from within Labor to overhaul tax cuts is expected to continue as the party prepares to launch its platform at the triennial national conference in Adelaide in July.
In its submission to a Senate inquiry, the Grattan Institute think tank said the 50 per cent discount was too generous and had “overcompensated” inflation for property investors over the past 25 years.
Shorten’s proposed 25% concession was recommended to be phased in over five years, raising around $6.5 billion a year to shore up the federal budget, reduce the tax burden on young Australians or increase state rental assistance.
The Center for Independent Studies, a conservative think tank, said the 50 percent discount was “simple and well understood and there is no strong reason to change it.”
The Senate investigation is expected to be announced on March 17.
