A common argument for abolishing negative gearing is that it
would improve housing affordability by making property investment less
attractive, theoretically freeing up homes for owner-occupiers.
However, this assumption overlooks key realities.
For one, the housing affordability crisis is driven by
fundamental issues, such as population growth, limited land supply, and
bureaucratic barriers to development, rather than by tax policies alone.
Negative gearing makes it easier for investors to hold
property long-term, contributing to stability in the rental market.
Moreover, most investors own only one or two properties and
aren’t the "greedy landlords” that some critics suggest.
These investors are average Australians looking to secure
their financial future through property.
Punishing them with tax penalties would not only affect
individual retirement plans but would have a ripple effect on the broader
economy and rental market.
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Jason Gwerder
Thursday, 13 February 2025
