The Australian Council of Trade Unions (ACTU) has reignited the debate over housing tax policy, calling for reforms to negative gearing and capital gains tax concessions. The ACTU proposes limiting these benefits to a single investment property, with the aim of improving housing affordability and redirecting financial incentives toward the construction of new social and affordable housing.
The proposal has drawn both support and criticism. Housing advocates argue that the current system disproportionately favours investors over first-home buyers, contributing to escalating property prices and limited stock. They believe capping tax concessions would help level the playing field and reduce speculative investment in the housing market.
On the other hand, property industry groups warn that such reforms could have unintended consequences. They argue that reducing investor incentives could lead to a decline in rental supply, higher rents, and a slowdown in private housing development. Some estimates suggest that limiting negative gearing could jeopardise the delivery of up to 80,000 new homes nationally.
The federal government has yet to take a formal stance on the proposal, although previous attempts to change negative gearing have proven politically contentious. As Australia grapples with a growing housing affordability crisis, the question remains: should tax policy be used as a lever to reshape the housing market?
Regardless of where the policy debate lands, it is clear that housing tax settings will be a major focus in the lead-up to the next federal election, as policymakers search for ways to balance investor confidence with the pressing need for more accessible housing.