If Labor wins the next federal election then we can expect changes to negative gearing and the capital gains tax discount. Despite the Coalition’s scare tactics, Labor’s 2016 campaign pledge to tilt the balance in the housing market “back towards first homebuyers” didn’t appear to do the federal opposition any electoral harm, and may even have boosted its vote. And housing affordability is probably an even bigger issue now than it was then: the latest polling by Essential Research suggests that only energy prices were of greater concern to Australians among economic issues.
But changes to negative gearing and the capital gains tax — the preserve of federal government policy — aren’t sufficient to make housing fairer and more sustainable. At least as important, according to analysis by the Grattan Institute, is reform of state taxes, and particularly the abolition of stamp duty and its replacement with broad-based property tax — something that is even more difficult to achieve politically.