A major election promise to could be stalled unless the Albanese government walks back on its promise not to make changes to negative gearing.
The Greens are threatening to revoke their support for Labor’s Help to Buy scheme unless the government agrees to wind back negative gearing and capital gains tax, which it has repeatedly vowed not to do.
The $329m Help to Buy scheme was a centrepiece of Labor’s election campaign and will require backing from the Greens to pass if it’s likely opposed by the Coalition in the Senate.
Greens leader Adam Bandt said alongside scrapping tax concessions for investment property owners he’ll also push Mr Albanese for a nationwide rental freeze and a cap on rental prices during housing talks.
“The system is stacked against renters and first home buyers, and Labor’s answer is a housing lottery for a lucky few and higher rents and house prices for everyone else,” Mr Bandt said.
“In negotiations with the government over the Help To Buy legislation we’ll push Labor to end the tax handouts for big property investors, freeze rents and build public housing to help renters and first home buyers.”
Labor’s Help to Buy scheme, which is pinned for debate in parliament this week, aims to assist up to 40,000 low-to middle-income families to buy their first home as long as they put down a minimum deposit of 2 per cent.
The government would take a 30 per cent equity stake in existing homes and 40 per cent in new builds under the proposal.
After Labor’s major shift on stage 3 tax cuts, discussion has erupted over whether it will scale back the use of negative gearing, a tax strategy allowing property investors who make a loss to reduce the tax they pay on their income.
Treasurer Jim Chalmers asserted on Sunday that Labor would not consider making changes to the contentious policy.
“No, that’s not something that we’re proposing, not something we are considering, not something that we are working up,” Dr Chalmers told Sky News.
According to the most recent Treasury figures, about 1.1 million property investors in Australia shed losses of $7.8bn and claimed $2.7bn in tax benefits in 2021.
About 80 per cent of tax reductions under the negative gearing scheme have gone to those earning above the median income, data shows, while 37 per cent has been claimed by the nation’s top 10 per cent of earners.
Parliamentary disclosure data shows 103 of 151 federal MPS own currently own two or more properties, with about 88 owning at least one investment property.
Greens housing spokesman Max Chander-Mather said rising housing prices and rents meant that home ownership was a far off reality for millions of ordinary Australians.
“Pressure works. Labor changed their position on Stage 3 tax cuts and now they need to change their position on negative gearing and capital gains tax,” he said.
“We can’t fix this until the government stops handing out billions of dollars in tax concessions to big property investors.”