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Prime Minister Anthony Albanese is seeing growing support to remove CGT discounts on housing which are helping distort the market. Picture: Hilary Wardhaugh\/Getty Images.<\/p>\n
The PM is under pressure as new housing data reveals 80 per cent of a $24bn tax benefit goes to wealthy Aussies while renters struggle with affordability.<\/p>\n
This after an Anglicare Australia report – out Tuesday – found more than 80 per cent of the benefit of the capital gain tax discount for investors flows to the top 20 per cent of households, while two per cent flows to the bottom 20 per cent.<\/p>\n
Anglicare Australia executive director Kasy Chambers said \u201cnow is the right time to take this issue on. There\u2019s never been more public support for action, and housing costs – both rents and house prices – have never been higher. This is exactly the moment to tackle it head on.\u201d<\/p>\n
MORE: Aussies warned: Billions in tax perks to be cut<\/a><\/p>\n Albo\u2019s gamble: Unions behind groundbreaking housing tax reform<\/a><\/p>\n This table shows the benefits received from government in billions of dollars by income quintile 2022-23. Source: Anglicare Australia.<\/p>\n \u201cRents have been rising sharply since the CGT discount was introduced. This is borne out by the surge in weekly asking rents over the past 25 years, and by Anglicare Australia\u2019s own Rental Affordability Snapshot, which shows that affordability has worsened year after year,\u201d Ms Chambers said. \u201cIf the argument is that these tax breaks keep rents down, the evidence shows that approach has been failing for decades.\u201d<\/p>\n The Anglicare report found the capital gains tax discount, particularly when combined with negative gearing, had turned housing into an investment game, driving up house prices and rents while delivering the overwhelming majority of benefits to people who already own property.<\/p>\n It showed the capital gains tax discount alone cost the federal budget $23.7\u202fbillion in 2022\u201323, with more than 80\u202fper\u202fcent of that flowing to the wealthiest 20\u202fper\u202fcent of households.<\/p>\n Its analysis for 2022\u201323 data saw the wealthiest 20 per cent of households receive the lion\u2019s share of housing-related tax concessions – more than $19 billion from the capital gains tax discount and $20.64\u202fbillion from the principal place of residence exemption.<\/p>\n By contrast, the bottom 20\u202fper\u202fcent of households received just $0.47\u202fbillion from the CGT discount and $3.36\u202fbillion from the principal place exemption<\/p>\n Ms Chambers said \u201cthe impact of the CGT discount cannot be understood in isolation. Its most powerful effects emerge when it operates alongside negative gearing.\u201d<\/p>\n \u201cTogether, these policies create a strong incentive to invest in property not primarily for rental income, but for capital growth.\u201d<\/p>\n She said investors are encouraged to bid up house prices, confident that any losses incurred along the way can be written off against their income, and that eventual gains will be lightly taxed.<\/p>\n<\/p>\n