Billions of dollars in tax breaks that push up house prices and lock people out of a home must be wound back to tackle the housing crisis and productivity, a group of housing sector advocates, economists, and union leaders have urged the government.
In a letter to the Prime Minister and Treasurer, the group has called for negative gearing and the capital gains tax (CGT) discount to be on the table at this week's economic reform roundtable, with savings to be invested in building public and community housing.
The letter has been signed by Everybody's Home national spokesperson Maiy Azize, ACOSS CEO Dr Cassandra Goldie AO, The Australia Institute Chief Economist Dr Greg Jericho, and ACTU Secretary Sally McManus.
Negative gearing and the capital gains tax discount are locking Australians out of secure, affordable homes. Reforming these would:
Reduce inequality and rebalance the housing market
Redirect billions into building new public and community housing
Improve productivity by diverting capital to more productive uses.
Everybody's Home national spokesperson Maiy Azize said: "Every year, billions of taxpayer dollars are handed to property investors through negative gearing and the capital gains tax discount, with everyday Australians paying the price.
"These tax breaks are among the most unfair and distortionary in our economy. They make housing less affordable, benefit higher-income Australians, and lock everyday people out of safe and affordable housing. Cutting them and using the savings to build low-cost rentals will mean more people will be able to afford a safe place to live.
"Investing in solutions that will fix the housing crisis boosts productivity in our country. Ending unfair tax breaks would not only take the heat out of the housing market and strengthen the budget but also free up funds for productive investments, like building more social housing, that will fix the housing crisis."
Read the letter here.
