The Coalition has criticised Anthony Albanese for considering potentially removing negative gearing for property investors, even as his own $2.2 million investment property comes on the market.
The Labour government has reportedly asked the Treasury for advice on possible changes to tax breaks for landlords, including modelling based on the economic impact of phasing out the concessions.
Negative gearing policies allow real estate investors to claim tax deductions when the costs of owning and maintaining the property, such as loan interest and maintenance expenses, exceed rental income.
These tax benefits can reduce the investor’s taxable income, potentially resulting in a lower tax bill.
Asked about the situation on Wednesday, Mr Albanese did not deny seeking advice from the Treasury. Instead, he said: “What we do is value public service.”
“I’m sure that, from time to time, public officials consider political ideas. That’s because we value them.”
Earlier this year, the Prime Minister evicted his long-term tenant in Dulwich Hill, in Sydney’s central west, and put the brick house up for auction.
A senior opposition spokesman has accused the prime minister of “making a lot of money from his rental properties” and “climbing the ladder on his back”.
Anthony Albanese (pictured with partner Jodie Haydon) may consider negative gear changes
Jim Flanagan, 45, has lived in one of Albanese’s investment properties in the inner-west Sydney suburb of Dulwich Hill for four years.
This comes after an analysis by RealEstate.com.au showed Albanese could have claimed tax breaks of up to $25,000 in his first year of owning the investment property.
“It’s quite curious, isn’t it? Now that Anthony Albanese has finished making a tonne from his rental properties, he’s selling up and getting the Treasury to consider taking the ladder off him,” the opposition spokesman told Daily Mail Australia.
“Why should the Australian middle class take another hit so that Labor can spend more money on pointless expenses like hundreds of thousands of dollars on business class travel for the ‘First Nations Ambassador’ or taxpayer-funded jobs for union officials?”
He was referring to Justin Mohamed, a First Nations ambassador, who spent about $145,000 on business-class flights last fiscal year while earning $350,000 a year.
The spokesman continued: ‘Albo should spend less time trying to raise taxes and fix his spending addiction.
‘The Labor Party sees the Australian middle class as a goldmine and is creating more taxes. I think most Australians are fed up with that.’
Albanese’s tenant, Jim Flanagan, a struggling bar owner, revealed in May that he had been given 90 days to vacate the property before it went on the market.
Anthony Albanese’s investment property is for sale. Its value is approximately $2.2 million.
The Prime Minister said he was selling the property (pictured) for personal reasons.
The prime minister said his personal life had changed and he had decided to sell the property. The three-bedroom house is currently on a property website and has not yet been sold.
“He has every right to do this,” Flanagan previously told reporters.
“I’m not suggesting not to do it, but I think tenants are really exposed right now, that power imbalance has been exacerbated by the rental crisis and the cost of living crisis.”
“I guess what we’re looking for is a bit more of a thoughtful approach to communication. Maybe a conversation. I certainly wasn’t even given the opportunity to discuss a rent increase or staying a bit longer, possibly if the house went on the market.”
It was later revealed that Albanese had reduced the rent for Flanagan during the pandemic and did not increase it to market value two years later, before deciding to sell.
If Mr Albanese was suffering losses on the property, he probably benefited from negative leverage.
Speaking at a news conference in Tasmania on Wednesday, the Prime Minister sidestepped questions about the negative leverage change and declined to say whether or not his government had asked Treasury for a model.
“I have not confirmed that. The Treasury, I am sure, like other departments, has a number of policy proposals and ideas. I want a public service that is full of ideas,” he said.
Anthony Albanese would not confirm whether his government is considering changes to tax benefits for property investors amid a housing shortage.
But Treasurer Jim Chalmers confirmed on Wednesday that his department was examining possible policy changes, including negative gearing and capital gains tax relief.
“Treasury looks at all kinds of policy options all the time,” he told reporters.
“It is not unusual for the civil service, and in my case my department, to look at issues that are speculated about in public or in Parliament – that is how a good civil service works.”
A separate ALP source confirmed that changes to negative gearing were being considered, but the government could still decide not to go ahead with any policy changes before the next election, due in May 2025.
Former Labor leader Bill Shorten’s plan to ditch negative leverage contributed to his loss of the “can’t lose election” to Scott Morrison in 2019.
When Mr Albanese took over the party leadership, he said changes to negative leverage were out of the question.
