The Real Estate Institute of Australia (REIA) has attacked the proposed reduction in the capital gains tax (CGT) discount, arguing that:
- Reducing the CGT discount (from 50% to 25%) would push landlords to raise rents to compensate for lower after‑tax capital gains.
- The proposed reduction could potentially affect about 2.4 million renting households.
- In a tight rental market, landlords would likely pass on costs.
- Housing construction rates would also fall.
“If CGT incentives were removed, there is a high probability that property owners would seek to recover the lost capital gain incentives through increased rents, which would then be passed on to tenants in an already constrained rental market”, the REIA said in its submission to the inquiry.
