One Nation to Allow Negative Gearing for 2 Properties

One Nation Leader Pauline Hanson has revealed her party’s own plan for managing negative gearing on investment properties to counter Labor’s recent contentious tax reforms.

Under the One Nation proposal, investors would be able to negatively gear up to two investment properties.

Negative gearing occurs when the costs associated with owning an investment property exceed the rental income it generates. The resulting net loss can be offset against other taxable income, such as salary, reducing the investor’s overall tax payable.

Investors who employ negative gearing generally seek to offset losses through long-term capital growth in the asset.

The federal government recently introduced reforms to negative gearing, whereby it will apply only to newly built homes from July 2027.

Coupled with capital gains tax reforms, the federal government claims the new model will “help level the playing field” for first home buyers, though real estate specialists say the benefit is likely to be minimal.

“One Nation supports Australians being able to negatively gear up to two investment properties,” Hanson said in a statement.

“There are about two million property investors in Australia about 75 percent of them own only one investment property and another 19 percent own two.

“One Nation supports these Australians who have worked hard and invested in their future while increasing the availability of rental accommodation.”

Hanson also said the federal government’s reforms on negative gearing would adversely impact younger generations.

“Labor is pulling up the ladder behind them on younger Australians with its changes to negative gearing and the CGT discount,” she said.

“Labor wants Australians to be dependent on government, not independent of it.”

Opponents of Labor’s plan have expressed concern that the changes could prompt landlords to exit the investment property market, tightening the rental market and pushing up rents.

The Housing Industry Association (HIA) has previously warned the full removal of negative gearing on existing properties could cripple supply and make conditions more difficult for renters.

HIA chief economist Tim Reardon said Australia was currently trying to squeeze 11 million households into 10 million homes.

“Australia’s housing challenge remains fundamentally one of supply and demand,” he said.

“It doesn’t matter how you adjust the share of ‘renters vs owners’, the result remains the same, we don’t have enough homes. The essential nature of housing and its scarcity will see prices rise, and homes increasingly owned by wealthier households until there are enough homes.”

Meanwhile, Treasurer Jim Chalmers said the Labor government was giving more Australians the opportunity to own their own home by making the tax system “fairer.”

“Our tax changes will help around 75,000 homeowners into the market over the next decade and are part of a package of housing reforms in this budget that will boost housing supply,” he said.

“Building more homes is the main game when it comes to addressing Australia’s housing challenge.

“That’s why new builds are exempt from the tax changes, to steer investment toward increasing supply.”