Some of the highest concentrations of people with negatively geared investment properties are in Labor-held electorates, a seat-by-seat analysis released by the federal government shows.
The income and tax statistics-based report by the Australian Taxation Office was published on Wednesday alongside a coalition attack on Labor’s policy to rein in the tax break.
Some 1.3 million Australians negatively gear investment properties, with 640,000 living in coalition electorates and 570,000 in Labor-held seats.
Treasurer Josh Frydenberg said Labor’s property plan would punish those who use negative gearing as well as those with equity in their homes.
“If you own your own home it will be worth less, and if you rent your home it will cost you more,” he told The Australian.
However, shadow Treasurer Chris Bowen said the findings overlooked a critical fact about Labor’s negative gearing policy.
Labor’s policy would be grandfathered – meaning it would not apply to existing investors – and would only apply to new builds.
“Those currently negative gearing properties across Australia will still be able to under Labor’s housing affordability reforms,” Mr Bowen said.
“Using this electorate data is nothing more than a hollow attempt to suggest these people will lose access to current tax concessions for those properties under Labor.”
Various economists have argued with the property market cooling, now is the best time to introduce Labor’s housing reforms, because its effect would be more muted.
The treasurer disagrees.
“It’s designed to smash house prices, that’s their policy,” Mr Frydenberg told Sky News.
He said even with the grandfathered negative gearing changes, investors would be selling into a housing market with fewer buyers.
Labor also plans to halve the Capital Gains Tax discount, including for new builds.
“If you rent your home you will pay more because you’ll have less investors who are prepared to charge lower rents in order to get subsequent capital gains,” Mr Frydenberg said.