ACOSS has rejected claims that the housing tax reforms are increasing rents, saying the real causes are a lack of affordable rentals and weak rental protections, which must be addressed through more public and community housing and limits on excessive rent increases.
"Claims that these reforms are driving up rents ignores the real causes of Australia's rental affordability crisis. Rents have been rising for decades because we do not have enough genuinely affordable rentals and because unlimited rent increases remain legal across most of the country," ACOSS CEO Dr Cassandra Goldie said.
"We have more than a quarter-century of evidence showing these tax breaks have made housing less affordable. Tax breaks that chase capital growth are not the solution to rental affordability. The vast majority of investors have simply used these tax breaks to bid up the price of existing homes.
"If we want to make renting more affordable, the solutions are clear. We need to build more public and community housing and introduce limits on excessive rent increases."
The legislated changes to the 50 per cent capital gains tax discount and negative gearing arrangements do not take effect until July 2027, and investors who already own rental properties retain access to negative gearing.
"These changes haven't started yet and don't affect existing investors. Anyone pointing to the tax reforms as a reason to raise rents is being disingenuous and opportunistic, and we should see through it," Dr Goldie said.
ACOSS said the tax reforms are not expected to materially affect rents across the market and could improve affordability where pressures are greatest by reducing tax incentives that have skewed investment towards higher-value rentals. The changes may also improve rental stability by reducing tax incentives for frequent churning of investment properties in pursuit of realising capital growth tax advantages.
"The tax changes will help more people access home ownership and could also improve rental stability and affordability in parts of the rental market where pressures are significant," Dr Goldie said.
ACOSS said the reforms will improve fairness by reducing tax advantages that have disproportionately benefited wealthier investors, and recent polling shows strong, majority community support for the reforms.
"The community knows these unfair tax breaks need to be scrapped, and they are demanding bold, structural reforms. The government should have the confidence to go further to address the housing crisis and make our tax system fairer, including by seeing through the reforms to the taxation of discretionary trusts," Dr Goldie said.
