05/06/2026
Tinkering with investor tax settings is nothing more than good optics :
Alongside possible changes to the capital gains tax discount, modifications to negative gearing are expected in the Federal Budget. Negative gearing allows investors to offset property losses against income, reducing taxable income, with benefits varying by tax bracket. Reports suggest the Government may remove negative gearing for those with three or more properties. While this plays well politically, the impact is limited. ATO data shows only a small fraction of investors hold three or more negatively geared properties, most with exactly three. Many could sell down to remain eligible, briefly boosting buyer supply but reducing rental stock, pushing rents higher. Others may raise rents to offset losses, again hurting tenants. Investors may also shift focus to lower‑priced suburbs, where first home buyers compete, intensifying pressure. In WA, private investors provide nearly eighty‑seven per cent of rental properties, with most owning one or two. Without balanced policy settings, rental supply will tighten further. Political parties must weigh optics against reality: investors are essential to housing markets, and sudden tax changes risk worsening affordability for both buyers and renters, undermining stability in already constrained markets where demand continues to outpace supply and pressure on tenants remains acute, leaving affordability challenges unresolved.
-Source REIWA