Labor MPs push for another major tax change that will impact property owners – here’s what it could mean for you

Labor MPs and unions are pushing for another major tax overhaul in the wake of Anthony Albanese’s controversial review of the third phase of austerity.

There is a growing call among Labor MPs for more immediate cost-of-living relief and also for support for a review of Labour’s negative gearing policy.

Negative gearing occurs when the cost of owning a rental property exceeds the income it generates, creating a taxable loss that can be offset against other income.

For example, if someone rents out an investment property for $20,000 a year, but he pays $30,000 in interest on his mortgage, he can essentially deduct $10,000 from his paycheck and only pay taxes on what’s left.

One Labor MP said there is broad support within the party for making negative gearing law changes because members are concerned it unfairly benefits older generations (stock image)

Negative gearing benefits investors who want to expand their real estate portfolio, rather than starters.

One Labor MP said there is broad support within the party for introducing negative gearing law changes because members are concerned it unfairly benefits older generations.

“It shouldn’t be easier to buy your second and third homes than your first,” the anonymous MP said The Australian.

However, another MP warned that this could only happen after the next election so that Labor would have a mandate for it.

“One broken promise is enough for one term,” the MP told the newspaper.

Last week, Labor MPs gave their unanimous support to a decision to halve the promised phase three tax cuts for Australians earning more than $180,000, in favor of a boost for lower earners (Photo: Treasurer Jim Chalmers)

Anthony Albanese promised at least 36 times during the election that he would make no changes to the statutory cuts introduced by the Morrison government.

But last week, Labor MPs gave their unanimous support to a decision to halve the benefit for Australians earning more than $180,000, in favor of a boost for lower earners.

The major decline has led to heavy criticism, with Labour’s reliability being questioned.

But Albanese has defended the decision, claiming his changes will provide more help to ‘middle’ Australia, while still providing a tax cut for ‘all Australians’.

Treasurer Jim Chalmers also threw cold water on hopes that Labor would tackle negative gearing during a press conference on Monday morning.

“We are not considering or considering reviving the policies we put in place in the 2019 election,” Mr Chalmers said.

‘Our focus when it comes to taxes and housing is on encouraging building to rent homes with the tax breaks I budgeted for in the May Budget.

‘So we haven’t changed our mind… we’ve changed our mind on the income tax cut because we’ve found a better way to give a bigger tax cut to more people so they can help with the cost of living .’

The treasurer was also asked if he was willing to break promises to the Australian public if “a better way” is found in other areas.

Meanwhile, Labor MPs and unions are calling for more direct support for living costs as the third phase of cuts does not start until July.

Electrical Trade Union national secretary Michael Wright said the ‘No.1 item’ to ease pressure on living costs was providing help with electricity costs.

This position was reportedly supported by Labor MP Brian Mitchell, who called for an extension of the government’s energy bill package.

Mike Freelander, the Labor MP for Sydney’s south-west seat of Macarthur, said Australian people in his electorate were struggling with transprot and medical bills.

“Pressures on medical costs are also very high as we approach the 40th anniversary of Medicare and more needs to be done to improve people’s access to primary care,” Mr Freelander said.

‘In suburban areas like mine, travel costs are a big factor, and I would really like to see something done there.

“It’s a killer, it really costs thousands of dollars a year.”