Until recently, I was a landlord. And I support Labor’s proposed changes to negative gearing and capital gains tax.
A decade ago, I booked consultations with every type of Australian bank. Even though I had $70,000 (my entire life’s savings) and a permanent full-time job, like many others at the time, I couldn’t secure a loan. The lender was clear: with this deposit, I would be lucky to afford anything in Sydney. The lender suggested I ask my parents, as though everyone can just ask their parents for an easy $30,000 top up to their deposit.
The messages were clear: my dreams to be an owner-occupier weren’t going to happen, I was too broke. My only real option? An investment loan. The interest rates would be higher, I’d still need to sign up for lenders’ mortgage insurance and pay even more money to the bank, but I’d get a foot on to the housing ladder.
I bought a one-bedroom apartment that needed work and rented it out while I rented somewhere cheaper. I was part of a growing trend of Australians who become “rent-vestors” – people who own property but can’t necessarily afford to live in it.
In political debates, we talk about negative gearing as though it’s a magical wealth hack for punters. It was more of a slog than a hack.
Every month I paid rent while also paying the mortgage on the apartment I owned. I paid water, strata, repairs, council rates and real estate costs; the tiny amount that remained from the rental income was my “profit”. The actual practical benefit was being able to do tax-deductible repairs to my place, a benefit of the scheme that is rarely talked about.
I was carrying the cost of two homes on one income, all for the sake of shelter. Every day I asked myself if the financial stress was worth it.
That’s why I support the government’s changes. No one should have to do what I did just to secure housing. Housing is a human right.
Since John Howard implemented negative gearing and the CGT discount in 1999, housing in Australia has been treated like an investment instead of what it is – an essential need, like food and water. Instead, the Howard government’s tax settings fuelled a culture where property speculation has become a national pastime.
The people who benefited most from these tax settings were rarely ordinary Australians with one modest investment property; it was the people leveraging equity so they could buy their fourth, 10th or 150th investment property.
Under-45s have been forced repeatedly to find loopholes and cracks to navigate an irrational system that was set up for the big end of town.
It’s the typical millennial story. Promised that if we did the right thing – finish school, get a higher education, get a good, secure job, not eat too much avocado toast – we could buy a house. Told housing was the safest path to security. Then we watched as prices rose faster than our wages. We watched as governments on both sides of politics chose to protect the asset class and the already wealthy instead of young people locked out of our futures. So, of course, people adapt however they can; we all still need to live, right?
This adaptation, this hustle, it’s not fair.
Australians have had to become speculative investors just to have a shot at shelter, which was an alarm bell that started ringing over a decade ago, and now the government of the day is forced to act, not out of the goodness of their hearts or values, but because of the rise of a rightwing populist party calling for affordable housing.
Across the world, young people have been facing rising inequality because of extractive economies. When people believe they won’t ever own a home, raise a family and establish a safe, secure future for themselves, trust in institutions starts to fall – aren’t these the same institutions that are supposed to help and support us? Cynicism grows, resentment builds, and it needs somewhere to go. The rise of One Nation in the polls is a warning shot from angry voters to Labor. It seems the ALP are finally listening now that votes are on the line.
Of course, some wealthy people are angry; lots of investors will lose their financial advantage, and to that I say, good. They never should have had the advantage to begin with.
I’m writing this from the apartment I own and live in. This was always the goal: a place where I could paint the walls, get as many cats as I want and drill holes in the wall. It took seven years.
I love living in my own place. Everyone should have that right. I hope to see more policies that put housing security in reach of everyone.
• Neha Madhok is a political strategist, writer and digital creator based in Sydney. Neha has previously worked for New South Wales and federal Labor MPs
