Anthony Albanese has been criticised by the Coalition for considering abolishing negative gearing for property investors as his own $2.2 million investment property comes onto the market.
The Labour government has reportedly asked the Treasury for advice on possible changes to landlord tax exemptions, including modelling of the economic impact of removing the concessions.
A negative gearing policy allows property investors to claim tax deductions when the costs of owning and maintaining the property, such as interest on loans and maintenance costs, exceed the rental income.
These tax benefits can reduce the investor’s taxable income, potentially leading to a lower tax bill.
Asked about the situation on Wednesday, Mr Albanese did not deny that he had sought advice from Treasury. Instead, he said: ‘What we do is we value public service.’
“So from time to time, I’m sure the public service looks at policy proposals. That’s because we value them.”
Earlier this year, the Prime Minister evicted his long-term tenant from Dulwich Hill, in Sydney’s west, and put the brick mansion up for auction.
A senior opposition spokesman accused the prime minister of “making a lot of money from his rental properties” and of “pulling the ladder behind him”.
Anthony Albanese (pictured with partner Jodie Haydon) may consider negative gearing changes
Jim Flanagan, 45, has lived in one of Mr Albanese’s investment properties in Sydney’s inner-western suburb of Dulwich Hill for four years
This is according to analysis by RealEstate.com.au, which revealed that Mr Albanese was able to claim tax benefits of up to $25,000 in his first year of owning the investment property.
“It’s strange, isn’t it? Now Anthony Albanese has finished making a lot of money from his rental properties, he sells them and asks the Treasury to pull the ladder up behind him,” the opposition spokesman told Daily Mail Australia.
“Why should Central Australia take another hit so Labor can spend more money on wasteful spending, 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 First Nations People’s Ambassador Justin Mohamed, who spent about $145,000 on business class flights last fiscal year, despite earning $350,000 a year.
The spokesman continued: ‘Albo should spend less time raising taxes and tackling his spending addiction.
‘Labor sees the middle of Australia as a cash cow and they are pushing for even more taxes – I think most Australians are fed up with it.’
Jim Flanagan, Albanese’s tenant and struggling bar owner, announced 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. It’s worth about $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 listed on a real estate website and has not yet been sold.
“He has every right to do this,” Flanagan previously told media.
“I’m not saying he doesn’t. But I think that tenants are really exposed again right now, that power imbalances have been exacerbated by the rent crisis and the cost-of-living crisis.”
“I think we’re just looking for a little bit more of a considered communication approach. Maybe a discussion. I certainly haven’t even had the chance to discuss a rent increase, or staying a little bit longer, possibly if the house came on the market.”
It subsequently emerged that Mr Albanese had reduced the rent for Mr Flanagan during the pandemic and failed to raise it back to market value two years later before deciding to sell.
If Mr Albanese made a loss on the property, he probably benefited from negative gearing.
At a press conference in Tasmania on Wednesday, the prime minister dodged questions about changing the negative gearing, declining to comment on whether his government had asked the Treasury Department for modelling.
“I haven’t confirmed that. I’m sure Treasury, like other departments, is making a range of proposals and policy ideas. I want a public service that is full of ideas,” he said.
Anthony Albanese would not confirm whether his government is considering changing tax breaks for real estate investors due to the housing shortage.
But Finance Minister Jim Chalmers confirmed on Wednesday that his department is exploring possible policy changes including negative gearing and the capital gains tax cut.
“The Treasury Department is constantly looking at all kinds of policy options,” he told reporters.
‘It is not unusual for the public service, and in my case my department, to investigate issues that are the subject of public or parliamentary speculation. That is how a good public service works.’
Another ALP source confirmed that negative gearing was being considered, but the government could still choose not to make a policy change in the run-up to the next election, due in May 2025.
Former Labor leader Bill Shorten’s plan to ditch negative gearing contributed to his loss of the “unlosable election” to Scott Morrison in 2019.
When Albanese took over the party leadership, he said changes to the negative gearing were off the table.