Housing fair go spruiked as Labor digs in on tax reform
Falling homeownership rates among young Australians are also included in the federal government’s latest pitch, which is still fighting fires weeks after the budget was announced.
Leveling the playing field for first home buyers has been a key selling point of Labour’s tax reform package; This package includes negative gearing and changes to capital gains tax.
“If you work hard you can get ahead, but that’s not the case for many Australians,” Finance Minister Jim Chalmers said.
“This is not the fault of older Australians, it is the fault of successive governments who ignored tax and housing challenges for too long.”
hosting odds The rate of 25-34 year olds has fallen faster than other age groups, with a seven percentage point decline over the past two decades from 2001 to 2021.
The combination of the 50 per cent capital gains tax cut and negative gearing introduced by the Howard coalition government in 1999 made housing an attractive investment, according to the government, at the expense of home buyers.
Reserve Bank research It also found that the proportion of Baby Boomer real estate investors has risen sharply since the capital gains deduction was introduced, from 12 percent in 2000 to 28 percent in 2023.
During the same period, the share of investors under 30 decreased from nine percent to four percent.
Under Labour’s changes, the 50 per cent discount would be scrapped and earnings would instead be taxed adjusted for inflation, with negative gearing phased out.
However, attractive tax application for new home construction will continue.
Opposition Leader Angus Taylor described the reform package as “toxic” and a war on wills at the Liberal Party federal council meeting in Melbourne on Saturday.
Mr Taylor has promised to repeal the changes if the coalition comes to power.
Property and property groups have also gone on the offensive, publishing modeling on Friday claiming the tax package’s impact on rental prices and housing supply will be worse than Treasury forecasts.
Business lobbies also criticized the plan to cancel the 50 percent capital gains tax cut, arguing that it would deter productive investment.
Plans for start-ups have been flagged and the government has consulted industry groups on other changes.
The tax changes have been referred to a Senate committee for review, and the committee will report back by June 22.
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