This federal election, both major parties have offered a “grab bag” of policy fixes for Australia’s stubborn housing affordability crisis. But there are still two big policy elephants in the room, which neither side wants to touch.
The first is negative gearing. This can apply to business losses relating to any investment. But in the context of housing, it allows property investors to claim annual losses incurred renting out an investment property as deductions against their taxable income.
Proponents argue this boosts the supply of rental housing by encouraging investment. Critics say it’s an unfair tax break that disproportionately benefits the wealthy while driving up house prices.
