Renters set to bear costs of another rate rise
With another interest rate rise set to be passed on to renters, the Everybody’s Home campaign is calling on the government to phase out tax-payer handouts for investors.
The cost of negative gearing and other tax breaks goes up when interest rates rise, because investors claim more in losses and tax deductions.
According to the modelling by the Parliamentary Budget Office, the cost of negative gearing and the capital gains tax discounts is set to soar to at least $157 billion over the next decade.
Yet, it would cost less to plug the social and affordable housing shortfall – an estimated $145 billion over the same period, based on figures in a Treasury review.
Everybody’s Home national spokesperson Maiy Azize said the government has an opportunity to fix a broken housing system.
“Housing in Australia is rigged against renters. Instead of helping people afford a decent home, the Government is spending billions lining the pockets of investors.
“Tax breaks on investment properties overwhelmingly go to the wealthiest people. Renters are the ones paying the price.
“Not only are renters paying exorbitant rents, but their tax dollars are being spent keeping investors afloat, instead of boosting social and affordable housing.
“Investors can either write off losses on tax or pass them on to tenants. It’s the people who live in these homes that are stuck in an expensive and dysfunctional system.
“A fairer system would give renters genuine choice and security. The Government can make that happen by investing in social and affordable housing, instead of spending billions on tax breaks for investors.
“Phasing out these tax-payer handouts would make it easier for working people trying to buy a home, free up billions to spend on social homes, and help take the heat out of the rental market.
“Our housing system should be about homes, not investors.”