What Would Really Happen if Negative Gearing Was Changed?

jordanlane on 31/08/2025 - 12:54

What would really happen if negative gearing was changed?

There’s been so much talk about negative gearing and whether it should stay or go, but the real question is how any change would actually happen. From what I can tell, there are three main possibilities:

Straight-up abolition: All negative gearing benefits are cut off immediately, for both new and existing investors.
Grandfathering: Anyone who already has a negatively geared property keeps the benefits, but new purchases don’t qualify.
Phase-out / transition (say 3 years): Deductions still apply for a while, but are reduced year by year until they disappear.

What do you think — would a government really risk abolishing it overnight, or is it more likely they’d grandfather existing investors and go slow on new ones?

Financial

Comments

Far Cough on 31/08/2025 - 12:59

+32

3- Phase-out / transition
- supersabroso on 01/09/2025 - 19:32
  
  +9
  
  Yep definitely, the Labor government already tried to phase it out by taking it to the 2016 & 2019 elections where they lost both. Australia wasn't ready to get rid of it back then and it's debatable whether they are willing to get rid of it now. If they are, it'll only be through a phase out method. If they remove negative gearing and the half price capital gains discount together, you'll get a 40% drop in house prices which no government will push through.
  - DangerNoodle on 01/09/2025 - 22:00
    
    +1
    
    If they abolish negative gearing and the discounted capital gains, people may just choose not to sell and will just keep it in their family as inheritance instead.
    
    My unpopular opinion, I don't think it's a good idea to get rid of negative gearing, at least not completely. As a renter, I'd be concerned about landlords increasing rents to offset the loss of negative gearing on their property and without the CGT, they would be penalised for selling.
    
    Plus, I'd be concerned about the implementation of any ramp down for negative gearing as it may potential impact our superannuation returns given that the super funds do invest in property as well.
    - Chandler on 02/09/2025 - 08:59
      
      +9
      
      increasing rents to offset the loss of negative gearing on their property and without the CGT, they would be penalised for selling.
      
      Many wouldn't have a choice - rent costs are whatever the market can bear. If landlords suddenly up rents they'll run out of renters who will/can pay those rates. Without renters, some (many?) wouldn't be able to afford to keep the property, which would result in a hike in property sales, which will mean a drop in prices.
      
      With rents up and purchase prices down, along with interest rates coming down, renters may find themselves suddenly in a position where they would be better off buying a property.
      - Ozybargdias on 02/09/2025 - 10:27
        
        +4
        
        @Chandler: Thank you for articulating this. The "axeing NG will cause rents to skyrocket" crowd fail to think more than 1 step ahead.
      - duchy on 02/09/2025 - 16:40
        
        +1
        
        @Chandler: Renters will live where in the meantime?
        
        There are moving costs involved as well.
        
        [Deactivated] on 02/09/2025 - 16:48
        
        -6
        
        @duchy: you mean driving? - if you pay someone to move things from one home to another for you - you deserve to be a tenant in perpetuity.
        
        [Deactivated] on 04/09/2025 - 19:31
        
        -1
        
        @[Deactivated]: F me some people are precious.
        1. Too rich and arrogant to pick a box up to move houses (always someone else’s problem and will pay for the privilege) because physical labor is beneath them.
        2. Then complain that they can’t afford a house (because they were too lazy to move themselves and save their money in the first place).
        
        ColtNoir on 08/09/2025 - 08:24
        
        @[Deactivated]: How much do you think removalists cost? It costs not much more than beer and pizza for mates than paying someone to move your stuff, far more efficient too.
        
        I can’t lift a fridge/bookshelf by myself, and there less likely to be damage to the property with a removalist than mates. Something you’re on the hook for.
        
        [Deactivated] on 08/09/2025 - 08:54
        
        @ColtNoir: I’ve moved houses plenty of times (for free and without the help of any mates) and haven’t damaged my fridge, bed or any property while moving with some care and some forethought.
        And it’s money saved by not simply outsourcing problems through laziness.
        It’s a mindset - some say “too hard, I’ll throw money at it” I say, “the money I saved can now be used for something else”
        Being lazy is a mindset.
        
        ColtNoir on 08/09/2025 - 10:16
        
        @[Deactivated]: Good for you, not all have the physical ability or mates that aren’t physically useless.
        You’re acting like we’re outsourcing the packing as well. The average a removalist has cost me is $300-$400, because everything is packed, fragile stuff has already been moved and I assist so it keep them on their toes.
        You know what this also does, stops me from needing to take a day off work because it only takes a few hours to move rather than a whole day/weekend like some of my friend who hire a truck (which isn’t free) and move themselves.
        
        [Deactivated] on 08/09/2025 - 10:18
        
        @ColtNoir: Lovely, it’s called arms and legs and renting a trolley for a day (or buy one from Bunnings) (if your box is over 10kg you’ve overpacked your box) and if you can’t lift 10kg - move to a nursing home because you cannot contribute to society in your current form.
        And no, I don’t have my mates help me move.
        
        If you’ve managed to get removalists for $400 good on you - post the company on ozbargain - others will appreciate it.
        I’ve spent a full day on the weekend moving things (that you would take a day of annual leave shows how entitled you are)
        But just don’t complain when you can’t buy a house and need to demonise negative gearing as the solution (theres always an excuse)
        
        ColtNoir on 11/09/2025 - 09:06
        
        @[Deactivated]: You’re a lovely bit of judgemental. Just because you’ve always done it your way, doesn’t mean it’s the only way.
        
        I don’t see how lifting 10kg relates to lifting a fridge, even with a trolley. To automatically say move to a nursing home, is ableist at best.
        
        If you think saving $200 years on moving costs is going to help with deposit, you’re cooked. By the time I’ve hired a truck and trolley, there’s a few hours already gone. I’d be moved by then.
        
        Additionally, complaining about a literal entitlement as being entitled is a stretch.
        
        I truly wish cancer on you and your able body ability.
        
        Chandler on 03/09/2025 - 16:40
        
        @duchy: Same place that other's who can't afford rents are currently living: friends' houses/couches, cars, parks, streets…
        
        I imaging many of whom we're talking about would be moving themselves and likely don't have a lot to move: it's a bit hard to acquire a lot of material goods if you're busy paying rent and/or saving for a deposit.
    - CalmLemons on 03/09/2025 - 00:04
      
      -2
      
      It's like when trump tries to fk with tariffs and the bond market taught him a lesson.
      
      The australian economy is built on selling iron ore, coal and natural gas while everything else gets propped up by the property market.
      
      China had it's economy based on investments into the property market.
      
      See how small/major changes pretty much scuttled their economy?
      
      Crash the housing market here, you will end construction instantly. No one is going to build a house that cannot be sold or worth less than construction cost.
      
      Crash the construction industry and the sudden loss of cash smashes into other industries causing varying degrees of unemployment, not to say the 1 in 10 jobs that belong to the construction sector.
      - dcep on 03/09/2025 - 06:03
        
        +2
        
        @CalmLemons: At some point , equilibrium will find its way round even if no one interfered.
        
        Chandler on 03/09/2025 - 16:41
        
        +1
        
        @dcep: Part of that issue is that government policy & projects are not contributing to this "equilibrium" you speak of…
      - Juice-Wa on 03/09/2025 - 08:40
        
        +2
        
        @CalmLemons: Construction industry would do some good to have a crash. Building a house is a nightmare in Aus with "unskilled" tradesmen slapping together build kits like it's a kindy art project. Has nothing to do with pay and everything to do with accountability, there are no consequences to these people in an economy with huge demand. Usually they would go out of business due to bad reputation. Now, I could slap up and fake business on google and have work for tomorrow, no questions asked.
        
        Chandler on 03/09/2025 - 16:43
        
        @Juice-Wa: Had a relative struggling to get their house finished because the builder couldn't find bricklayers that met their budgeted rates. Unsurprisingly, that company is no longer in existence…
        
        CalmLemons on 04/09/2025 - 00:01
        
        -1
        
        @Juice-Wa: Not happening then the entire office workforce thinks they can get more pay by WFH 2 days a week then expecting trades people to be paid peanuts.
        
        It became like this when they paid all the apprentices shit so now you just have the worst of the worst left.
        
        Building a house is easy if you're paying top dollar. In the low to mid tier you're just getting the drop kicks.
        
        Juice-Wa on 04/09/2025 - 09:31
        
        @CalmLemons: There's also a shortage of educated office workers so the vocational shortsightedness has impacted both blue and white collar jobs, but at least apprentices can get paid to learn from 15 years old. Qualified tradespeople aren't paid peanuts in Australia, and our tax breaks for them to be business owners is phenomenal. Blue collars have it pretty well off here.
        
        It became like this when they paid all the apprentices shit so now you just have the worst of the worst left.
        
        Many dodgy tradespeople coming from the 30+ ages, where apprentice wages were just the norm, so it's not that. But education and apprenticeships probably need an overhaul now. Too many Australian's are working in business, arts, or media and taking away from the industries we need.
        
        Building a house is easy if you're paying top dollar
        
        Yeah, because you're paying for all the rework. Pay someone at any level, don't supervise and assess each stage, pay for rework and you won't be impressed when you get the keys, just about guaranteed building standard violations.
  - FlyingMiffy on 02/09/2025 - 21:53
    
    Where do you get 40% from? Is that the same guesstimate from COVID when the apparent zeroing of immigration and visitors would plummet house values?
  - Drakesy on 03/09/2025 - 18:01
    
    Labor lost because they went after franking credits at the same time as chasing investors
    
    Naturally the boomers/pensioners didn’t want the 1-2 punch so blocked it
    
    Polls all indicate Australians are in support of the removal of negative gearing. Just not the removal of franking credits.
    - [Deactivated] on 08/09/2025 - 10:58
      
      -2
      
      You’d be wrong - the greenies have demonised it and Labor 20 year olds have zero idea how it works (and think it’s free money)
      Want to save the amount of money spent on negative gearing 20x over? Scrap NDIS
- Dr Phil on 01/09/2025 - 21:38
  
  +6
  
  Just look up what happened back in 1985 when the Hawke-Keating Labor Government actually removed negative gearing
  
  It only lasted 2 years before they were forced to do an about-face and reverse thier decision
  
  Here is a brief history of negative gearing:
  
  https://treasury.gov.au/sites/default/files/2019-03/Equality…
  - [Deactivated] on 02/09/2025 - 16:50
    
    -1
    
    if the government spent things efficiently and effectively we would be living in a utopia where no one would feel the need to negative gear.
    Unfortunately we live in a society where Albo and co waste our money, forever taking more in the form of taxation to fund their exorbitant wages, so we - the people need to do what we can to get ahead.
    - whyisave on 04/09/2025 - 14:43
      
      Unfortunately we live in a society where ..
      
      … where private corporations have bypassed democratic processes,
      and control the ears/eyes/mind (with media),
      control the money supply,
      encourage war spending through bogus conflicts,
      use minority issues as a wedge against the majority.
      - [Deactivated] on 04/09/2025 - 19:22
        
        @whyisave: Private corporations have not bypassed democratic processes.
        You haven’t seen the corruption that I see in the government daily.
        
        whyisave on 05/09/2025 - 08:52
        
        @[Deactivated]: Unelected Blackrock bypasses democratic institutions, because with the investment dollars, according the ESG scores (which the population did not have a say in), they changed society's ideals and values.
        
        With a monopoly of your eyes and ears, they make sure you get the message.
        
        If you talk of corruption in government, then society as a whole will need to put a blank ballot in, at next election.
        You cannot change the system by voting harder.
        
        It's like being an abusive relationship, where staying passive only emboldens the dynamic.
        
        [Deactivated] on 05/09/2025 - 12:24
        
        @whyisave: I disagree. a company's role is to get the best return on investment for whatever they are doing/providing.
        Blackrock is based in another country.
        
        They are also not "a monopoly" (there are other investment companies).
        
        If you do not like the idea of a company that grows investments, I think you should contact the government about Superannuation and tell them its wrong and "no more super"
        
        But these crazy conspiracy theories are there to push the far left and further demonise businesses.
        
        (I feel bad for the plumber that needs to unblock your toilet one day - the poor capitalist pig, contributing to the destruction of society through running his own business, shit up to his elbow… he should just do it out of the goodness of his heart)
        
        whyisave on 06/09/2025 - 08:22
        
        @[Deactivated]:
        
        I disagree.
        
        I don't think you understood what I meant, nor what ESG scores are.
        A significant amount of companies have to adhere to this, or they lose out on investment dollars.
        
        Sure, a company's role is to return maximum shareholder value, etc. etc.
        
        However, Blackrock CEO has already said publicly, he's interested in changing society's behaviours, so if you look carefully at how the investment dollars can subvert democratic processes, then it becomes clearer.
        
        They are also not "a monopoly" (there are other investment companies).
        
        By 'monopoly' of the eyes and ears, I meant, that private corporations have a complete domination of your ears and eyes, ie. they make sure you get their message.
        
        There's a reason, why newspapers and online, have a section called "Business";
        it's not called "Workers", ie. you do not hear Worker's issues…but what "Business" is doing.
        Workers issues are buried in court cases, and sometimes come out in the press.
        
        The ABC (and SBS) are the state-sponsored media channels, but even they have been found to be impartial.
        
        So, this is what I meant, by private corporations effectively control and subvert democracies, because they are the "top layer" [UNELECTED] and the government are the "middle layer/managers" [ELECTED or 'SELECTED'], to manage the "bottom layer", ie. the working class and general population.
        
        The government doesn't even control money supply, ie. all Central Banks meet regularly and decide what interest rates to set and force society to obey, etc. etc…
        
        Then, you see that the people participate in this 'democratic process', but what can the people effectively change or control?
        Not a lot, since private companies:
        ○ own land, sell apartments
        ○ own media (so they control your eyes and ears)
        ○ sell you drugs (so your body/health is at their mercy)
        ○ make money from all digital currency transactions (so they tell everyone "managing cash is expensive!"
        ○ ripping out all of the natural minerals, resources from this land…and when it's empty, they'll move to the next country (and still not pay tax or resource rent)
        ○ harvest all of your data, all of your memories, communications,…thoughts?
        
        The government has the command of the military and police, to enforce laws (eg. put people into jail), manage taxation and also social wellbeing (eg. Centrelink, Disability Services).
        
        The rest is all private interests, all driven by share-holder capitalism from local and significant amount of foreign money, whose interest is not for Australia's benefit.
        
        Basically, you are more of a customer in this shopping-centre called Australia, and less and less a citizen, where the country's natural resources should be benefiting the citizens, as they own a piece of this country too.
        
        But these crazy conspiracy theories are there to push the far left and further demonise businesses.
        
        When people resort to name-calling, eg. "crazy" or "conspiracy theory", the discussion is going into the bin at this rate.
        
        I think you should contact the government about Superannuation and tell them its wrong and "no more super"
        
        I say it's wrong for Australian superannuation funds to invest in foreign countries.
        Australian superannuation should invest inside Australia only.
        
        [Deactivated] on 06/09/2025 - 08:39
        
        @whyisave: Can you TLDR your manifesto?
        If its blackrock is evil, and they’re taking over Aus somehow, okay. Agree to disagree
        
        whyisave on 06/09/2025 - 08:49
        
        @[Deactivated]: .
        
        "manifesto"
        
        "evil"
        
        "taking over"
        
        So many tabloid styled buzzwords, which is not even what was being said,
        makes it sound like I'm reading the Dailymail or watching A Current Affair !
        
        Agree to disagree
        
        You were on a vendetta against "Albo", and I presented a viewpoint, that the focus on government is the 'wrong focus', because they are also beholdened to private corporate interests, and an example of corporate interests is the ESG score.
        
        Therefore, private corporations subvert public democratic institutions, when the people did not have a say on any of that.
        
        Now, I'm not saying I support Labor or Liberal, but I was saying that this country has been carved up, and being plundered by corporate interests, when it's a very rich country…but the inhabitants are struggling.
        
        [Deactivated] on 06/09/2025 - 08:58
        
        @whyisave: I’m going to respond to your last paragraph… just because…
        
        It’s a very rich country but the inhabitants are struggling. This is a failure of an incompetent government, not corporate interests. And speak for yourself, I’m not struggling (financially) I find bargains where I can, put money aside and plan for the future (when the government doesn’t stuff it up)
        
        whyisave on 06/09/2025 - 09:02
        
        @[Deactivated]:
        
        And speak for yourself
        
        There lies the difference.
        
        I am speaking for others that ARE struggling.
        
        [Deactivated] on 06/09/2025 - 09:06
        
        @whyisave: I think you need to get out from under your “black rock” and read what you said again.
        
        whyisave on 08/09/2025 - 21:02
        
        @[Deactivated]: Punter's Politics: CBA "stealing" from poor people
        
        https://www.facebook.com/reel/1161619885808167/
        
        [Deactivated] on 08/09/2025 - 22:26
        
        +1
        
        @whyisave: CBA is a bank in Australia. Blackrock is an investment firm in America.
        I don’t need to hear propaganda from punters politics - he’s being funded by someone (his shtick is to spread fear and anger and victimise the public) “poor us it’s the big corporations are evil” which takes away from the fact that we have personal choice (you don’t have to get a credit card, go into debt, gamble, take drugs, bnpl, latest fashion) but the push from people like that is that we are all helpless victims at the mercy of big business. And it takes away from the people that have a job at these places. The reality is much more nuanced (that and humans have personal choice…)
        
        I don’t doubt that the CBA charges fees. I also know that they charged them to some of the most vulnerable in society which is very old news - that they charge fees also isn’t new. However I wouldn’t classify it as theft.
        You or any of us aren’t obligated to bank with them (or any of the big 4 for that matter)
        
        I don’t have anything against the poor. I’d like them to contribute more to society just like I’d like the Albanese government to do more for Australia but we cannot get it all.
        
        But for you to say blackrock and corporations (generally) bypass democratic processes is blatantly incorrect, then push punters - also shows the media content you view and then parrot.
        
        Here’s one for you - while not my opinion, I did find it entertaining (subjectively) (link below).
        At the very least understand both sides of the coin before blindly agreeing with only one.
        (That way you can maintain independent thought and don’t have to agree with every political push that turns you body one way or the other) have an open mind and understand others perspectives even if you don’t necessarily agree with them yourself (I don’t agree with everything I watch or read, but I can find some things entertaining)
        
        https://www.facebook.com/PaulineHansonAu/videos/oppression-o…
        
        whyisave on 10/09/2025 - 20:43
        
        @[Deactivated]:
        
        CBA is a bank in Australia. Blackrock is an investment firm in America.
        
        Huh?
        Check who the biggest (and/or "significant") shareholder of CBA are/were ?
        It's Blackrock.
        This foreign investment firm is a major shareholder of Australian companies too,…and if/when you go digging, you will uncover more.
        
        I don’t need to hear propaganda from punters politics - he’s being funded by someone (his shtick is to spread fear and anger and victimise the public)
        
        Everyone spreads propaganda.
        The more biases you hear, the more balanced your view will be.
        
        I was not promoting Punter's to you, as a way of saying "public good, they bad".
        I was pointing out your micro-view 'incompetent government' (or blaming singular Albo), is not the reason why CBA was in Punter's purview.
        There are these private corporations, who sit above government, and they are unelected by the people/workers, yet they influence so much in this world…and even control governments, not to mention have a near total domination of your eyes and ears (ie. print media, online news, advertising, Cloud storage of your memories, etc.),…and somehow the focus is still "oh…bad government".
        People cannot even get into government, if you're not cosy to the private corporates first.
        
        push from people like that is that we are all helpless victims at the mercy of big business. And it takes away from the people that have a job at these places.
        
        Every now and then, you find out, these "PLACES" underpay these workers too, … but no one in the companies loses their jobs,…because all those previous payroll or HR employees might have moved on, etc.
        It happens too often, in a first-world country like Australia,…and yes, people are at the mercy of big business, because debt is ONLY created by big business, and a debted population are definitely at the mercy of others, because if they don't repay their debt,…they risk losing their homes.
        
        A heavily indebted society is really a reason for many unstable families, and financial stress contributes divorces….but big business only looks at money but not the human 'cost'.
        If you ever had the luck of growing up or visiting a society or country, where people did not have debt, then you would see how happy people are/were.
        
        However I wouldn’t classify it as theft.
        You or any of us aren’t obligated to bank with them (or any of the big 4 for that matter)
        
        No one is obligated to bank with them, but they are not obligated to "steal" either.
        
        I don’t have anything against the poor. I’d like them to contribute more to society
        
        Hahaha… You should be asking Gina Reinhardt to contribute more to society too then!
        
        But for you to say blackrock and corporations (generally) bypass democratic processes is blatantly incorrect, then push punters - also shows the media content you view and then parrot.
        
        I said that when you look at ESG scores (which you have not because you wanted a TLDR version of it from me), then you will see how societal norms and values are subverted, because those behaviours were never put to a referendum, but somehow private corporations through their dominance of media and money, … can massage all the minds of a society.
        
        You should check out the concept of "Techno Feudalism" by Yannis Varoufakis and see, that technology has taken over the big capital business structures, and now vying for complete control of society,…to the point where you will need to think: "when you are voting,…what are you actually voting for?"
        
        Here’s one for you - while not my opinion, I did find it entertaining (subjectively) (link below).
        At the very least understand both sides of the coin before blindly agreeing with only one.
        https://www.facebook.com/PaulineHansonAu/videos/oppression-o…
        
        Funny you send me this link, and talk about "both sides of a coin", because I have watched all of the "Please Explain" series on Youtube, some years ago. I like all those videos, as they're amusing and they cut through the sharp wit, caricatures of the politicians and sometimes toilet humour.
        Still, I agree with many of those sentiments in that animation series, and more.
        
        It's also funny to see Pauline meet Gina, at lunch and hanging out socially.
        
        There is a slow but sure decay in this country, and we need to bend over backwards to preserve it.
        Yet, there is so much energy put into dividing the population because 'they' want us to keep looking horizontally, when we should be fighting vertically.
gamemaster on 31/08/2025 - 13:32

+41

Negative gearing should only apply to building new properties, not for purchasing existing properties. A big issues is housing supply so by not increasing supply, for a given demand it drives up property prices. It makes property a speculative asset rather than a place people live. It also competes investors, who have an advantage of negative gearing, against home buyers.

Realistically negative gearing on property will not change as it is political suicide to bring in changes.
- - Dr Phil on 01/09/2025 - 21:52
    
    +10
    
    WRONG!
    
    There is no "bigger" tax discount given because of negative gearing.
    Property Expenses are 100% tax deductable regardles of negative gearing rules
    
    Removing negative gearing does not remove a property investor's right to claim legitimate tax deductions
    
    Negative gearing simply affects cash flow and hence the ability to finance a property purchase
    
    Negative gearing allows tax payers to claim all tax deductions TODAY and hence pay less tax today.
    But they end up paying more tax tomorrow!
    
    The Removal of negative gearing means that SOME of those tax deductions (in excess of the amount of property income) will be rolled over into the NEXT TAX YEAR and hence the property investor is forced to wait to claim those tax deductions some time in the future
    (much like depreciation works to postpone a large portion of tax deductions into the future years)
    
    So its just a matter of a tax payer being able to claim all tax deductions and hence pay less tax today vs having to wait until tomorrow.
    
    By the same token, removing negative gearing means the tax office can collect more tax today but less tomorrow.
    
    In the end its a cash neutral or zero sum situation
    
    See its all about cash flow or who gets the benefit of the money first
    - oztite on 02/09/2025 - 10:05
      
      +1
      
      Unfortunately most people don't or don't care to understand this… abolishing negative gearing won't affect the middle class much as they'd be happy to defer tax deduction. The "rich" already buy with company structures so never cared about negative gearing or capital gain tax discount anyway. It only affects those stretching to borrow to the max to buy an investment property.
      
      The government should just abolish negative gearing (and shut all immigration), wait for 5 years, let people see what it looks like. Otherwise these straw men will be there to waste oxygen and no one ever cares to address the fundamental issue of not enough housing, too expensive to build etc.
      - duchy on 02/09/2025 - 16:46
        
        +2
        
        @7412547854: The cost of buying and selling of shares can be tax deducted against personal income. Just like any other investment.
    - ColtNoir on 08/09/2025 - 08:26
      
      Agree. The bigger impact will be removing the CGT concession on property
- lew380 on 01/09/2025 - 20:36
  
  +7
  
  Supply and demand. Demand, the elephant in the room. You can watch an economist talk for an hour and they never quite get to the demand, particularly the forced demand that the government, introduce…. Your either a racist or a corporate interest lobbyist. Why can't we have a middle ground!
  - [Deactivated] on 02/09/2025 - 16:52
    
    -2
    
    people used to know that all politicians are idiots (especially in Australia) - the influence from America is what has contributed to the divide.
  - Drakesy on 03/09/2025 - 18:02
    
    -1
    
    Shhhh “tHATs RacIsT”
    - whyisave on 04/09/2025 - 14:55
      
      -1
      
      punch blokes in the mouth ?
Neoika on 31/08/2025 - 13:39

-1

Less new builds.

Refer to this article recommended by Google to me today: Up to three quarters of investors in parts of Sydney negatively geared.
- Bluto Mindpretzel on 01/09/2025 - 21:45
  
  +3
  
  That doesn't make sense for a couple of reasons. Firstly there are only 3 nations on the planet that permit negative gearing (nz, canada, aus). All the other nations on the globe appear to be managing their builds at least as well as aus.
  
  Secondly, over 90% of investor property purchases are existing builds, not new ones.
Benoffie on 31/08/2025 - 13:46

-4

The last scare caused a significant movement of investors out of the market. Did it lead to increased housing availability or affordability? No.

Envisage same again on a larger scale. Rents increased to move from negative to positive gearing, properties owned by corporations not single investors.
- mskeggs on 31/08/2025 - 17:51
  
  +19
  
  The last scare in the 1980s didn’t move the needle on investment or home prices, but no laws ended up changing.
  Hard to believe there are a bunch of investors who could raise the rent but choose not to do so because of negative gearing. Wouldn’t they raise the rent now?
  My personal opinion is it would generate acres of press discussion, be an actual nothing burger, but result in reduced price growth over the next 5 or 10 years as the property gluttons invest a bit less and first home buyers find themselves in a better position.
  
  I don’t have any religion about it being only fair to support negative gearing across all sorts of investment. Our tax policy needs to serve our community, not the other way around.
  
  A good start would be to grandfather to new builds only.
  - Benoffie on 31/08/2025 - 18:08
    
    -7
    
    The last scare was in the change over from LNP to ALP and the beginning of the current taxation review (about 5 years now). People erroneously attribute the movement to Covid but it was due to that.
    
    The fact is, the vast majority of property investment has been and continues to be geared, even past people's retirement age (65+). If the mechanism ceases in any capacity, there is zero appetite from governments to pick up public housing
    - mskeggs on 31/08/2025 - 19:27
      
      +4
      
      You reckon the uncertainty of a possible labor gov was more responsible for house prices than the uncertainty of a global pandemic?
      That's a bit of a stretch.
      Rents also dropped substantially, which you would have expected to increase if your theory that it was driven by negative gearing changes.
      
      I don't know any evidence that the majority of investment housing is to negative geared for investors. Maybe you mean they are more active in new purchases?
      I can find this link that says almost half are negatively geared:
      https://theconversation.com/how-many-of-australias-2-2-milli…
      
      It suggests only 306,000 investors hold more than one property negatively geared. So a proposal to limit this, to say only negative gear one property, would be a drop in the bucket.
      - [Deactivated] on 02/09/2025 - 10:29
        
        -4
        
        @mskeggs: the incompetence of the Labor gov makes it everyone’s responsibility to buy as much as possible, reduce their taxes as much as possible and heighten the need to get ahead at other people’s expense as much as possible.
    - [Deactivated] on 04/09/2025 - 19:37
      
      What we do know is that Albo and co (Labor) have had 5 years to do something about it and so far have had their little circle jerk (outsourcing their own jobs) in the form of an economic summit and still achieved nothing.
  - Lastchancetosee on 01/09/2025 - 12:11
    
    Well put.
- ColtNoir on 08/09/2025 - 09:53
  
  Unless NG AND the CGT concession on property is removed, the demand from speculative investors will persist. There’s far to many FA’s recommending NG properties out of the gate, knowing they’ll make it back when they sell in 5-10years.
Jaduqimon on 31/08/2025 - 13:46

+16

wouldn't do a thing to house prices. negative gearing is just a bonus. will just give landlords more excuse to increase rent.

I want them to abolish negative gearing. Then that's 1 less excuse for people who cant afford homes to blame on lol.
- mskeggs on 31/08/2025 - 19:29
  
  +1
  
  Once again I find myself in agreement with your conclusion despite beginning from a completely opposite starting point.
  
  Maybe you need a newsletter and become an influencer!
- greyeye on 01/09/2025 - 10:53
  
  +1
  
  I foresee no immediate change, but it should prevent a new investor from buying and borrowing as much as (if not more). Due to the land tax law change, we saw a drop in some property prices in VIC. Expect the same for the national property market.
  We will not see a price drop, but gains will be less than if not bugger all. That too will prevent further fuelling the market.
  
  You're right that the rent may go up a bit. But while the cost of rent and house prices are closely related, investors fleeing the market will create a vacuum that will eventually be offloaded to owner-occupiers. It's the ever-increasing market that everyone feels defeated by.
  - Indomietable on 02/09/2025 - 20:06
    
    investors fleeing the market will create a vacuum that will eventually be offloaded to owner-occupiers.
    
    So less rental properties which lead to more expensive rent? How is this helping the small guys?
- gromit on 01/09/2025 - 15:40
  
  +2
  
  yep, it would have little if any impact on house prices, though it would give very valid excuse to increase rents. renting or owning there is a shortage and as long as we have that shortage house prices won't be coming down. What they need to be focused on is incentives to actually build.
- jellykingdom on 02/09/2025 - 13:24
  
  Back to blaming immigrants instead, and then possibly the phases of the moon next?
  - FallaM on 02/09/2025 - 13:35
    
    +1
    
    Not blaming immigrants, but instead the politicians who enabled mass immigration. If you're still burying your head in the sand on this then not sure what to say. You can do the math yourself on net overseas migration and the amount of new dwellings being built per year. This easily extends into other areas of life too. Schooling, healthcare, jobs.
  - ferry594 on 02/09/2025 - 17:55
    
    +2
    
    Why do you think house prices are not higher due to immigration?
    
    Mathematically, if you have 1000 people trying to buy 1000 houses, your ""fair value" on a house may be x
    
    If the number of houses stays the same, and now there is 1001 people, that marginal demand for houses pushes the price from x to x plus something, as there is more people chasing the same amount of things.
    
    So, immigration certainly increases house prices.
    - fusion17 on 03/09/2025 - 18:19
      
      Significantly reducing immigration is as likely as recruiting thousands of Indians to build a million houses, funded by the UAE.
      - ferry594 on 03/09/2025 - 18:52
        
        @fusion17: And if we built the houses, we'd then need for governments to slide further into debt to fund the build of the infrastructure around them.
        
        So all in all, the easiest thing to do would be to stop immigration.
      - [Deactivated] on 04/09/2025 - 19:41
        
        @fusion17: Funny you say this. It was actually talked about as a legitimate plan in an Indian news paper with their economic minister.
        
        https://www.macrobusiness.com.au/2025/09/india-to-build-1-mi…
tenpercent on 31/08/2025 - 13:51

+10

It would shift investment properties out of the hands of smaller investors who are overly reliant on negative gearing and into the hands of larger investors who do not rely on negative gearing.
- mskeggs on 31/08/2025 - 19:33
  
  +7
  
  This is an actual serious concern, and in the USA consolidation of ownership of rental properties has been a big problem.
  I'm leaning towards a rule that says an individual may negatively gear one new property as long as you own it, and maybe some extra land tax or similar on corporate landlords.
  The aim, once again, is to promote additional housing. Not reward holding existing housing, and further, discourage speculation in existing housing.
  - AustriaBargain on 31/08/2025 - 21:28
    
    -2
    
    an individual may negatively gear one new property
    
    So what would happen if every man, woman, and child in Australia realised the Australian Dream and owed a house and an investment property, who is going to live in 30 million investment properties? We'd need to import 30 million Indian families to live in them. And they are going to want the Australian Dream too when they get residency, so who is going to live in the 60 million investment properties?
    - mskeggs on 31/08/2025 - 22:18
      
      +3
      
      Not sure what you are saying.
      At the moment, where every man woman and child in Australia may negative gear investment properties there are about 2.2 million investment properties (including people who have more than one).
      My suggestion is to start by putting some limits in place, see if that reduces some heat for home buyers, and then continue to recalibrate.
      I think immigration faster than we build houses and infrastructure has also contributed to house prices growing above affordability, but this is just one part to address - it doesn't stop us also addressing other factors, and I think all the factors (like planning laws, regionalisation, investment in transport and more) also need to be addressed.
      
      There is no silver bullet.
      The desire for a silver bullet stops changes that in combination make a difference.
      - moar bargains on 01/09/2025 - 13:52
        
        @mskeggs:
        
        The desire for a silver bullet stops changes that in combination make a difference.
        
        Reminds me of the BP oil spill skit: https://youtu.be/2AAa0gd7ClM?si=G3SxCskHvufgt5wX
        
        "let's just do nothing and maybe it will sort itself out" 🙄
  - [Deactivated] on 04/09/2025 - 19:42
    
    Those that actually own more than one property and rent to others know that negative gearing is not actually that great a deal.. it’s marginally better than a kick in the head.
DingoBilly on 31/08/2025 - 13:55

+4

It would need to be grandfathered/phased in. Noone would ever just wipe it out immediately.

It would reduce house prices in the short - medium term. You'd need to put in place more policies to keep it down in the long term.

Overall a good change, and I say that as someone with IP. The housing market in Australia is stupid and unsustainable. Need to rein it in before it implodes on itself.
- mskeggs on 31/08/2025 - 19:37
  
  +2
  
  Agreed. The idea we can't change anything ever because someone might not win as hugely as they hoped is dumb.
  If we grandfather negative gearing beyond one property, reducing the deduction value by 15% a year will see none in 6 years with very few being appreciably worse off.
  
  If we had done it 6 years ago we'd still have a housing problem, but would have reduced one factor contributing to it.
tenpercent on 31/08/2025 - 14:15

+6

It woud likely have a net zero impact on house prices because the total supply of housing will not change and the total demand for housing will not change. It may push house prices higher temporarily as construction of new homes (which increases the supply of housing) would be less attractive for smaller investors.
- dtc on 31/08/2025 - 15:15
  
  +5
  
  While the total demand won’t change, what will change is the price people are willing to pay for an IP. If you can only make an IP at a particular price work financially because of negative gearing then you can’t make it work at that purchase price without NG. So you have to pay less as an investor. Take investors out of the market and prices will likely fall
  
  In theory. Whether people just continue to buy and expect massive capital gains who knows
  
  In the short term, at least, getting rid of NG or reducing it will scare a lot of investors away.
- Typical16-bitEnjoyer on 01/09/2025 - 17:53
  
  Disagree, it would absolutely make an impact on house prices.
  
  If you take investors out of the pool of buyers for existing properties, who can pay more due to tax incentives and leveraging off existing IPs, its common sense house prices will fall.
  - Lunarboogie on 01/09/2025 - 18:47
    
    +1
    
    Which us exactly why people like me (and countless others) have been advocating for the removal of NG.
    
    The rusted ons will flood the zone with hysteria and predict huge economic and social regression - as if the current settings have a led to an ideal outcome.
    
    Removing NG would take investors out of the market and allow first home buyers in. I'd rather my taxes go to subsidising young families than the 2.2 million land lords (myself being one) who seemingly don't need a hand up (me included).
    
    Also if NG was the human right that supporters think it is, why is that only a handful of countries allow it? If it was the ticket to good public policy, everyone would be doing it and they aren't (look no further than NZ to see the impact there when NG was removed).
  - tenpercent on 01/09/2025 - 20:19
    
    +2
    
    If you take investors out of the pool of buyers for existing properties
    
    Who said anything about taking investors out of the pool of buyers for existing properties?
    
    It will be ultimately be a game of investor musical chairs. Heavily negatively geared (HNG) folk will lose their seats. Larger investors, corporate investors and positively geared investors will buy up anything left over by the HNG folk. Some negatively geared investors who are well on the way to making their properties positively geared will hang tight and hold on if they can wear a few years of losses without a tax deduction. Even some of the HNG folks will just create companies and sell their properties into the company and book rental property losses against other company income.
    It'll be a boon for lawyers and accountants and financial advisors. Some lucky first home buyers may get some scraps.
    
    Ultimately supply won't increase, demand will still exceed supply. So even though prices may stagnate briefly while the above dance of musical chairs takes place, prices will keep going up until supply exceeds demand. Economics 101.
    - Typical16-bitEnjoyer on 01/09/2025 - 21:35
      
      -1
      
      Who said anything about taking investors out of the pool of buyers for existing properties?
      
      I did. Can you read?
      
      Economics 101.
      
      I would be shocked if you ever went to university.
      - Crow K on 01/09/2025 - 21:41
        
        @Typical16-bitEnjoyer: This isn't his first rodeo (or even his second) at trying to understand the connection between negative gearing and property demand on here. You should cut your losses now.
        
        Typical16-bitEnjoyer on 01/09/2025 - 21:44
        
        -1
        
        @Crow K: Don't give him that much credit. I suspect he struggles to balance his boomer cheque book.
        
        Crow K on 01/09/2025 - 21:49
        
        +1
        
        @Typical16-bitEnjoyer: Thankfully I don't know enough about his domestic arrangements to come to that sort of conclusion, I only have the sorry experience of seeing dozens of comments of him asserting nonsense like negative gearing being deductions for a property purchase and so on.
        
        It's the kind of talk that would probably fly at a barbecue, but I'll get my economic policy discussion elsewhere.
        
        tenpercent on 01/09/2025 - 21:52
        
        @Crow K:
        
        nonsense like negative gearing being deductions for a property purchase and so on.
        
        LInk?
        
        I've made no such claim. You must have been partaking in libations when you "read" that.
        
        Crow K on 01/09/2025 - 21:58
        
        +1
        
        @tenpercent: This you?
        
        Can't even remember their own arguments. Sounds like you've been partaking in libations to the "blackout" level.
        
        If you scroll further down in the sorry affair, you ask if property developers are staying in their negatively geared properties (a k a "maybe they are claiming deductions for the houses they are staying in").
        
        It was pretty bad, and it sounds like you didn't learn from it, which is why I am not opening up that can of worms with you again, but instead warning others that you're not an understander on this topic.
        
        tenpercent on 07/09/2025 - 10:26
        
        @Crow K: I stand by that comment.
        
        None of what I said amounts to claiming "negative gearing [equals] deductions for a property purchase".
        
        You clearly still have reading comprehension problems.
        
        Maybe you can get a gold star for participation though.
        
        Crow K on 07/09/2025 - 19:14
        
        @tenpercent: From "I never said that, you were clearly drunk lol" to "of course I said that and I stand by it, you have comprehension problems lol"
        
        If I wanted to someone do backflips I'd buy tickets to the circus and watch the clowns
        
        Of course, clowns can maintain a sense of dignity however, so obviously this isn't the perfect analogy.
        
        The good news is we both seem to enjoy you being wrong, so there's that.
        
        tenpercent on 07/09/2025 - 19:43
        
        -1
        
        @Crow K: Still lacking the reading comprehension I see? Or are you playing the part of the deliberate chaos agent? How's your dirty diesel ute?
        
        Now, let's be more clear, for you, and for other readers who may be fooled by your disinfo…
        
        You said that I:
        
        assert[ed] nonsense like negative gearing being deductions for a property purchase and so on. ❌
        
        I then correctly denied that claim. ✅
        
        You then linked to this comment of mine where I actually said:
        
        You're still confusing two different things:
        1. demand for buying houses (which may temporarily be reduced and may temporarily slow price growth but only result in a transfer of properties from smaller to bigger property investors who can still achieve the same effect as NG by holding their properties under a company structure), and
        2. demand for living in houses (which will be entirely unaffected).
        
        Negative gearing is an incentive for 1, not for 2.
        
        …as if that's even remotely the same thing as your disinfo. ❌
        
        I then said that "I stand by that comment", and clarified that your assertion and my comment are two different things. ✅
        
        And now you are feigning (?) confusion about the difference in those two statements yet again. ❌
        
        By the way, has the mass-immigration induced homelessness crisis not reached your town yet?
        
        Crow K on 08/09/2025 - 21:22
        
        -1
        
        @tenpercent: You don't need to self-sabotage your gigantic wall of Reddit-tier text with bizarre nonsensical openers like whatever the "dirty diesel ute" comment was meant to be.
        
        I can absolutely guarantee, like all of your other attempts to post coherent thoughts on here, it can fail on its own merits.
      - tenpercent on 01/09/2025 - 21:45
        
        -1
        
        @Typical16-bitEnjoyer: I know you did. I'm suggesting it's a baseless assertion. Putting an end to 'negative gearing' won't take investors out of the pool of buyers. That's an incredibly naive take.
        
        I would be shocked if you ever went to university.
        
        Then count yourself shocked.
        
        Typical16-bitEnjoyer on 03/09/2025 - 08:30
        
        -1
        
        @tenpercent: Disagree. Your previous post and assertion on "HNG" is baseless.
        
        Happy for all investors to "sell" their IPs to a company entity and claim losses through that. Plethora of CGT would be incoming and those individuals lose all their silly benefits offsetting from their regular wage. Win for the public at large, big loss for them. Might even…..make them revisit their investment strategies and … Make them invest in something different, such as shares…..and take them out of the pool of buyers.
        
        tenpercent on 07/09/2025 - 10:35
        
        @Typical16-bitEnjoyer: I see you're playing with specifics can't see the wood for the trees. Yes, some specific individual investors may be taken out of the pool of buyers. But there is a sufficient surplus of investors in the pool of buyers (and indeed a significant surplus of wannabe owner occupiers) that the slack will be taken up almost immediately and there will be no statistically or materially significant decline in prices.
        
        As for "plethora of CGT would be incoming", that would be the case whether they sell up to their own company or sell on the open market?
Hardlyworkin on 31/08/2025 - 14:35

+5

Limit to around 2 houses. Phase the additional out in 5 years so the opposition can always opt to change it back.
- nukewell on 31/08/2025 - 19:25
  
  +1
  
  Only ~130k investors have >2 investment properties in Oz and not all would be negatively geared.
  Making that change would have F all impact
  - Aneurism on 01/09/2025 - 21:11
    
    +3
    
    Too many people are oblivious to the fact that negative gearing can help those who don't have the capital to get on the ladder… People who are well off have access to investment structures and companies they can use instead regardless.
    
    Negative gearing will always exist for business structures. Removing individual NG just means the average joe will be even more disadvantaged as compared to those who understand investment structures and have the money to set them up.
    - tenpercent on 01/09/2025 - 21:51
      
      +3
      
      People who are well off have access to investment structures and companies they can use instead regardless.
      
      Negative gearing will always exist for business structures.
      
      Many people here don't comprehend this.
    - IamHere2 on 02/09/2025 - 05:44
      
      Business can't get 50% CGT discount.

What Would Really Happen if Negative Gearing Was Changed?

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