The former federal Liberal MP Keith Wolahan has proposed capping negative gearing at one established property and five new builds, in a move he says would boost housing supply and help first home buyers.<\/p>\n
In an essay titled Liberal Foundations, published on Monday in Inflection Points<\/a>, Wolahan argues his party has lost more ground to Labor than to teal independents in multicultural and outer suburban seats.<\/p>\n He said of the 44 metropolitan seats held by the Coalition in 2013, only seven have been lost to the teals. By contrast, 28 seats were lost to Labor.<\/p>\n He said while the party won four elections under John Howard speaking to \u201cPhil and Jenny\u201d \u2013 two archetypal swing voters crafted by Liberal pollster Mark Textor \u2013 it wasn\u2019t appealing to today\u2019s equivalent: a 32-year-old university-educated woman renting in suburban Melbourne, whose small business-owning parents migrated from China three decades ago.<\/p>\n \u201cShe works hard. She pays her taxes. She wants to buy a home, start a family, and build a life. She believes in aspiration. She should be a Liberal voter, yet she is not,\u201d he said.<\/p>\n Sign up: AU Breaking News email<\/a><\/p>\n \u201cThe story of this voter highlights the structural failure of the Liberal party<\/a>. It is a failure to meet the needs of today\u2019s Australia.\u201d<\/p>\n To become the \u201cparty for first home buyers\u201d, he suggests refocusing negative gearing<\/a> \u2013 a tax concession allowing investors to deduct rental property losses from their other income<\/a> \u2013 toward newly built properties.<\/p>\n Under his proposal, investors would be limited to claiming negative gearing on one established dwelling but could claim deductions on up to five new builds.<\/p>\n Pointing to 2025 data showing 82% of investor loans went to established dwellings, Wolahan told Guardian Australia the change would free up more homes for young people.<\/p>\n \u201cThere\u2019s also a political dimension, which says that the Liberal party is willing to touch something we didn\u2019t in the past,\u201d he said.<\/p>\n Keith Wolahan, who lost the inner-Melbourne seat of Menzies at the 2025 election, argued the Liberals lost more ground to Labor than teal independents in multicultural and outer suburban seats. Photograph: Mike Bowers\/The Guardian<\/p>\n Wolahan said his policy should be \u201cfully grandfathered\u201d \u2013 meaning investment properties bought prior to the policy\u2019s implementation would be unaffected \u2013 to provide \u201ccertainty\u201d and remove the \u201cincentive for a scare campaign\u201d.<\/p>\n Wolahan \u2013 a former army commando who was once touted as future Liberal leader \u2013 lost his suburban Melbourne seat of Menzies at the 2025 election, in part due to the party\u2019s unpopularity with Chinese Australians<\/a>.<\/p>\n Jonathan O\u2019Brien, who is the editor-in-chief of Inflection Points, is also the lead organiser for Yimby Melbourne. He welcomed Wolahan\u2019s proposal to \u201crefocus our tax settings to spur productive behaviour within our economy\u201d.<\/p>\n But Martin Duck, a post-doctoral research associate at the University of Sydney, who has written extensively on negative gearing, described the proposal as \u201ca very minor tweak\u201d.<\/p>\n