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The federal budget’s changes to investor property taxes are designed to reduce market demand, lower home prices, and boost first-homebuyer participation and the homeownership rate.
The changes to negative gearing and the capital gains tax will reduce the after-tax return on property investment, thereby reducing investor demand.
Already, home lenders have begun adjusting their lending criteria for investors to reflect reduced cash flow, thereby creating a second-round impact.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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