One Nation candidate David Farley said at the Griffith forum he’d prefer GST reform rather than CGT changes. Photo: Oliver Jacques.
The One Nation and Nationals candidates for Farrer have both said they would be open to reforming the capital gains tax (CGT) discount as part of efforts to improve housing affordability.
At present, Australian investors who sell an asset such as an investment property after holding it for more than 12 months receive a 50 per cent discount on the capital gain, meaning only half the profit is added to their taxable income.
The Greens have long supported scrapping the discount entirely, arguing it disproportionately benefits property investors, inflates house prices and makes it harder for first home buyers to enter the market.
The federal Labor Government has not ruled out CGT changes in the upcoming budget and is reported to be considering options that could wind back the discount.
Region asked Farrer by-election candidates about their stance at a recent Griffith forum.
Nationals Farrer candidate Brad Robertson said he did not trust Labor on tax reform but was open in principle to targeted changes affecting investors with multiple properties.
“There’s a lot of people out there who are not on huge incomes who use negative gearing and the capital gains tax discount to get themselves into the market. There’s also a lot of people also gaming the system who have a lot of properties, so we need a balance there,” he said.
“I’m open to the idea of a consideration [to take away the discount] for people who have a lot of homes, but you can’t scrap it because there’s a lot of people out there who use it as their only way to get into the market.”
One Nation candidate and Farrer election frontrunner David Farley said he believed housing affordability was better addressed through changes to the GST rather than the CGT.
“First home buyers should be able to buy a house free of GST impost upon all building. We [also] want to remove GST on insurance from houses,” he said.
When asked about CGT reform, he said: “That would be one thing definitely under consideration but we think it would be quicker and more effective through the GST model.”
Neither the Nationals nor One Nation has advocated for changes to the CGT discount in official policy documents.
Lucas Ellis, who is running for the minor party Sustainable Australia, was more direct in his support for reform.
“We would advocate for abolishing negative gearing and capital gains tax discounts, grandfathering existing arrangements. We hope this will allow young first home buyers into the market,” he said.
“There’s a lot of fearmongering out there that this won’t be possible, but there’s a lot of research out there that this won’t be the case.”
House prices in Griffith have risen by more than 50 per cent over the past five years, with the average price now sitting at around $620,000.
Griffith real estate agent Robert Cavallaro said removing the CGT discount would likely have consequences for the local rental market.
“I don’t think it would be fair. The average mum and dad would have to pay more tax than companies,” Mr Cavallaro said.
“It will take buyers out of the market, which will put pressure on the rental market.”
