Treasurer Jim Chalmers claims the capital gains tax discount is "unfair" and "unacceptable." But as an everyday mum-and-dad investor, I can assure him the current arrangement is operating with breathtaking efficiency.
I was enjoying a perfectly reasonable Sunday morning at my primary residence in Point Piper when I saw Treasurer Jim Chalmers on Sky News. His words chilled me to my core. The housing tax system, he declared, is “broken,” “unfair,” and “unacceptable.” He was laying the groundwork for Tuesday’s budget, signalling a devastating betrayal: breaking the government's sacred promise to leave negative gearing and the capital gains tax discount alone.
I nearly dropped my macchiato on the imported travertine tiles I just successfully claimed as a depreciating asset. Broken? Unfair? Jim, mate, I don’t know what housing market you’re looking at, but the one I’m standing in is operating with flawless, beautiful efficiency.
Let me be clear: I am not some faceless corporate monolith. I am an everyday mum-and-dad investor. Well, mostly dad, as my wife and I structured the family trust so the assets sit entirely under a holding company to minimize our tax footprint, but the point stands. We are the backbone of this nation. And yet, when Chalmers looks at us, he doesn't see the heroic providers generously hoarding the country's shelter supply to rent back to young people at exorbitant premiums. He sees a piggy bank.
The capital gains tax discount is not a loophole. It is a fundamental human right. Without the government graciously halving the tax on the massive, unearned wealth generated by my properties simply existing in a supply-strangled market, what incentive would I have to bid fifty thousand dollars over the asking price at a Saturday auction against a desperate young couple? The discount is the very engine of Australian aspiration. It gives those young couples something to look up to as they quietly pack up their lives and move three suburbs further out.
And negative gearing? Please. Calling it "unacceptable" is an insult to the delicate financial ecosystem of this great country. By allowing me to write off the losses of my investment properties against my personal income, the government is essentially subsidizing my empire. It’s a beautiful partnership. I buy the house, the taxpayer helps me pay for it, and the renter pays off the mortgage. It is the ultimate team effort. To dismantle this in Tuesday night's budget would be a catastrophic disruption of the natural order.
Chalmers claims that “all of the comments that we have made in the past has reflected that overwhelming focus on housing supply.” Well, I am supplying housing. I own seven houses. That is seven houses I am generously permitting other people to live in, provided they pass a stringent background check, earn triple the rent in combined income, and do not under any circumstances affix anything to the walls. If the government removes my tax incentives, I might be forced to sell these properties. And who would buy them? First-home buyers? People who actually intend to live in them? The sheer chaos of allowing actual residents to own the homes they inhabit would devastate the rental market.
We only need to look at the recent political landscape to see the danger of alienating the asset class. Over the weekend, the Liberal party suffered an absolute bloodbath in Farrer, losing the seat to One Nation. Deputy Leader Sussan Ley urged her colleagues to accept the loss with humility, noting that “voters never get it wrong.” I couldn't agree more. The voters are sending a clear message: they are terrified. They are terrified that the fundamental Australian promise—that you can buy a house, rent it out to someone earning half your salary, and have the federal government cover your losses—is under threat.
If the Treasurer touches the capital gains discount, the entire philanthropic enterprise of landlording collapses overnight.
Alistair is absolutely right. We are providing a vital public service. Do you know how exhausting it is to manage a portfolio of this size? Just last week, I had to spend three grueling hours on the phone with my property manager ensuring we passed a fifteen percent rent increase onto a family in Parramatta because the Reserve Bank raised interest rates by a quarter of a percent. I am absorbing the emotional labor of these macroeconomic fluctuations so the tenants don't have to worry about complex monetary policy. They just have to pay me.
Chalmers insists there are "additional steps that need to be taken to make the housing market fairer." Fairer for whom? Because it certainly isn't fair to the thousands of hardworking investors who mapped out their early retirement based on the ironclad assumption that the Australian government would eternally underwrite their property speculation.
If Tuesday's budget does indeed touch negative gearing, we are staring down the barrel of a dark, unrecognizable Australia. An Australia where homes are treated as places to live rather than highly leveraged financial instruments. An Australia where the phrase "portfolio" is once again restricted to struggling artists.
I implore the Treasurer to step back from the brink. The system is not broken. It is working exactly as it was designed to. And if he doesn't believe me, I invite him to come sit on the deck of the beachfront property the taxpayer helped me acquire, look out at the ocean, and tell me this isn't the greatest country on earth.