Mega landlords 'can't lose' as revenue collapse brings negative gearing boon
www.abc.net.au
Despite a surge in interest rates and a jump in loss-making rentals, few landlords are selling up. Experts say it's because negative gearing and the capital gains tax discount protect their investments.

The ATO data, released exclusively to the ABC, shows the only investors making an average rental loss in 2022–23 were those with 19 or more property interests, both on an individual investor and individual rental basis.

…

In 2022–23, profits from investor-owned rentals plummeted 73 per cent.

In dollar figures, that equated to net rental income (income after expenses) falling from almost $5.9 billion in 2021–22, to less than $1.6 billion in 2022–23.

Despite the drop, investor numbers, and the number of rentals they owned, shrank less than 1 per cent, suggesting falling rental profitability did not trigger any significant rental sell-off.

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The ATO data showed mega landlords with 20 or more rentals were the only group that made average losses throughout the COVID-19 era of record-low interest rates.

Mr Eslake says this underscores the importance of negative gearing to the wealthiest investors and scuppers the argument that it is predominantly used by “mums and dads trying to get ahead”.

  • null_dot@lemmy.dbzer0.comEnglish
    71·
    5 days ago

    Obviously negative gearing and capital gains tax concessions have to go. I think gone completely, all at once is probably not the right move but I’ll let the modelling people figure that out.

    That said, using interest rates as a way to throttle economic activity is fucking bullshit.

    With the eye watering interest rates we’ve had over the last several years it’s been Gen X and under doing the heavy lifting while as usual boomers enjoy the benefits.

    I don’t really have a solution but fuck me there has to be a better way.

    • buxtente@lemmy.worldEnglish
      3·
      4 days ago

      We’ve legislated ourselves into a corner - we can’t get rid of CGT concessions and negative gearing without crashing the housing market and therefore our economy…

      The only way out is slowly introduced reform that aims to flatten house prices, but it has to be done almost clandestinely so as to not scare investors.

      • null_dot@lemmy.dbzer0.comEnglish
        1·
        4 days ago

        I agree that changes need to be measured and carefully considered.

        There’s so many ways to do that though, grandfathering or capping.

    • makingStuffForFun@lemmy.mlEnglish
      2·
      4 days ago

      Gen x here. Agree. We get leveled. Again. Whilst the boomers just coast through it, mortgage free, reaping bucket tonnes from their multiple properties and huge super, and sipping their laté in delight.