Is negative gearing up for reform?
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www.abc.net.auHere’s a concise update on recent discussions about negative gearing in Australia.
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What it is: Negative gearing allows investors to deduct losses from rental properties against other income, reducing taxable income. This remains a politically sensitive topic in housing policy debates.[1][5]
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Latest developments (late 2024–early 2025): Treasury was reported to be modeling options to modify or scale back negative gearing and the associated capital gains tax (CGT) discount, with the government emphasizing housing supply and affordability as priorities. However, senior leaders publicly stated that there were no immediate plans to implement changes, and reforms were framed as not imminent.[3][4][1]
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Public and political reactions: The prospect of reform sparked ongoing discussion among policymakers, opposition, and various economists, with some proposing a range of options from targeted tightening to near-elimination for certain scenarios. Reports suggested potential election-impact considerations given the policy’s popularity among investors.[5][1][3]
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Notable subsequent coverage: After initial ambiguity, several outlets continued to report on Treasury options and political signals, including electoral implications and expert commentary on how such reforms could affect housing supply and rents.[4][6]
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2026 perspective: By early 2026, coverage remained focused on whether any reform intentions were renewed ahead of elections, with mixed signals from government officials and ongoing public policy debates about housing affordability and investor incentives.[8]
Illustration (example): A simple way to think about the policy is to compare two scenarios for an investor:
- Scenario A: Current rules remain; investment losses offset other income to reduce tax.
- Scenario B: If reforms were enacted (e.g., limiting negative gearing or CGT concessions), the after-tax profitability of property investment would decrease, potentially cooling demand and influencing rents.
If you’d like, I can pull the latest specific articles from reputable outlets and summarize the key proposals and their projected fiscal impact, with inline citations.