Why is Australia’s ‘Housing Crisis’ still a problem?


“Tax subsidies are unsustainable, and unaffordable” – Australian Labor Party 

Negative Gearing refers to the situation where investors, mainly overseas investors, in property buy homes that will make a loss in the short term but when selling it in the future, it aims to generate a capital gains.

A capital gains tax discount is a tax imposed by the government when individuals sell their property for a profit, and they are entitled to a 50 per cent tax discount on their capital gains if they have held the property for more than one year (Australian Labor Party, 2016, read more here).

Both negative gearing and the capital gains discount are currently common procedures occurring in the Australian housing market and have not achieved any benefits to boost the housing supply and encourage the creation of new homes which again, are deemed unaffordable to low-income households resulting in an oversupply of empty homes in Australia and leaving low-income households with no affordable homes.

The capital gains discount and negative gearing has also cost the Budget over $10 billion a year which is more than what is spend on education, child care and most importantly housing affordability (Australian Labor Party, 2016).

Which means, because the Labor Party have not become the elected ruling party of Australia, they are unable to act unless they come together with other parties to pass a bill. So if the Labor Government does not raise any awareness about the growing issue of the housing crisis in Parliament, rental affordability will still remain a problem to low-income households.

What do you think should be done?


Comment your thoughts down below!!!

-Roof Us First



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