By Graeme Salt
Taxes rise for only about half of property investments under the latest budget – and in many cases they fall.
That is the conclusion of research from economics think tank the e61 Institute (linked to University of NSW)
Its research followed 920,000 individual housing investments held between 2008 and 2025 and concluded:
- Taxes rise for only about half of property investments.
- Most negatively geared investors don’t face more tax in dollar terms but do in present value terms. This is because rental losses are still fully deductible but cannot be claimed until later, when the investor sells.
- Capital gains tax (CGT) falls for most. Most past investments have been below the return threshold above which the 50% discount beats the new inflation deduction.
- High leverage investors and retirees (those with close to zero income) are the most likely to pay more tax.
- Investment risk decreases as tax is now better aligned with the size of the gain.
Investors on lower incomes are some of the biggest winners as the reforms make rental income losses deductible against capital gains rather against labour income, and CGT is often paid at a higher tax rate than labour income tax.
High leverage investors and retirees are some of the biggest loser (as they are typically on close to zero income) are the most likely to pay more tax.
Graeme Salt is an award-winning mortgage broker. For a no obligations consultation on your home loan needs, please contact him on 02 9922 5055
How many housing investors pay more tax under the reforms? – e61 INSTITUTE
