You don’t need to be rich in Australia to be a landlord thanks to the wonders of negative gearing. More than 2.1 million Australians own investment properties and 1.3 million negatively gear, mostly men and women on moderate incomes who have seized the opportunity to build a nest-egg for retirement.
At the 2019 election Labor proposed to abolish negative gearing for all investment properties other than new ones. It also proposed to reduce the capital gains tax discount on investment property from 50 per cent to 25 per cent, increasing the amount of tax paid on the sale of a property by 50 per cent.
In effect, Labor wanted to put a sin tax on thrift. It was placing a double disincentive for future generations to invest in property, enjoy the benefits of an income stream and accumulate wealth that their parents and grandparents enjoyed. It will make it harder for young Australians to accumulate wealth over their lifetimes, forcing more future retirees onto state benefits.
Housing is the single largest contributor to the net worth of Australians. The estimated overall value of the 9.6 million dwellings in Australia is $6.5 trillion, more than double the value of superannuation funds ($2.7 trillion) and more than four times the value of Australian listed stocks ($2 trillion). Some 27% of Australian homes are privately rented, giving us one the largest pools of private rental accommodation per head of population in the world.