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:

  1. Straight-up abolition: All negative gearing benefits are cut off immediately, for both new and existing investors.
  2. Grandfathering: Anyone who already has a negatively geared property keeps the benefits, but new purchases don’t qualify.
  3. 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

  • jam-donuts on 03/09/2025 - 14:42

    Meanwhile Labor fastracked a half assed proposal to allow people to borrow more with lower deposits, while allowing a flood of people to come into Australia. Look forward to an even bigger bubble, but is it really even a bubble if it never pops ?
    I personally am from a double income household and I have been outbid at every single auction in the last 4 months in eastern suburbs of Melbourne. The only question I have is "where are all these ppl getting these ridiculous sums of money from to bid so high !!!" ????

    Would removing negative gearing create a market where ppl are not bidding 1+ mill for a semi knockdown house from 1950s. If someone is willing to pay then the market will continue to go up.

  • dontboopthesnoot on 03/09/2025 - 17:34

    It would change the view of property as as a home first and investment second, which is a good thing. Its not a fix all solution but overtime it would be better and hopefully normalize the market.

  • monty168 on 03/09/2025 - 17:48
    +1

    I think the government will eventually phase it out.
    However, investing in housing is such a big deal that I wouldn’t be surprised if it makes no material difference to house prices.

  • lilyesp on 03/09/2025 - 20:26
    +1

    If you can take a loan out on a small business and that interest is taxable…i dont see why the same shouldnt apply to landlords. A business is a business…

    • AustriaBargain on 03/09/2025 - 21:14
      -1

      Homes shouldn't be a speculative business.

      • lilyesp on 03/09/2025 - 22:33
        +1

        Why..so food .basic milk and bread aint…

        • AustriaBargain on 03/09/2025 - 23:37

          How is milk and bread a speculative investment?

          • lilyesp on 04/09/2025 - 10:21
            +1

            @AustriaBargain: Any business is speculative. You hope your commodity goes up in price from base level.
            Maybe currency crypto shares gold etc. Better examples

            • AustriaBargain on 04/09/2025 - 23:04

              @lilyesp: You hope, but you don't sanely assume that people will be paying $30 a litre in 30 years time.

  • [Deactivated] on 03/09/2025 - 21:07
    +2

    Negative gearing is like Prostitution, some people don’t like it - but everyone needs a root.

  • amsaini15 on 03/09/2025 - 23:37
    +1

    Government artificially market by migration. Market and prices will adjust accordingly with any changes to negative gearing. I don't see big drop or any determental affect in long term. But does Govt has the courage to make the right move?

  • saltypete on 05/09/2025 - 08:23
    +1

    Negatively gearing a property is a side hustle, no different from doing Uber really. If its a business treat it like a business, if it isnt a business remove the tax write offs, but also get rid of the other business and cost obligations for landlords too. Rents may end up cheaper.
    There's some fundamental problems with Australia's tax base and I dont think there's an appetite for increasing taxes for working people while multinationals are exporting our mineral resources and energy supplies with zero tax.

    • whyisave on 06/09/2025 - 08:30
      +1

      no different from doing Uber really.

      People don't need a Uber to live, have children and grow old in.

  • welcomeUniverseWorld on 06/09/2025 - 14:33

    In the long run, abolishing negative gearing would mostly lower house prices rather than push up rents, because when investors sell to first-home buyers, rental demand falls along with rental supply. Straight abolition gives the sharpest price correction and fastest affordability boost for new buyers, but it’s politically explosive.

    Rich can not get richer. Poor has a chance of affording home for first time.
    market is better.

    What do you want? Do you want politicians to get donation from rich people? or do you want to serve the people?

Login or Join to leave a comment
Login Join