The latest Rental Affordability Index report – commissioned by the community housing sector – has taken a swipe at negative gearing and its partner-in-crime, the capital gains tax (CGT) discount, claiming they are forcing-up rental costs for lower income households:
In Australia, this shift towards renting and increased rental costs, is driven by a range of factors. Since the 1990s, the introduction of the capital gains tax reduction and negative gearing has drawn more investors to the housing market at the expense of owner occupiers, while driving more households into the rental market. Recent interest rate conditions and widening income inequality have reinforced this effect.
