The 'Australian housing investment: analysis of negative gearing and CGT discount for residential property' report by ACIL Allen Consulting debunks the most common myths around negative gearing and the Capital Gains Tax discount and shows the bottom line benefits delivered to supply.

Mum and Dad investors are overwhelmingly the ones who benefit most for the ability to negatively gear their property investments.

This is middle Australia. 66.5% of taxpayers who earn an annual income of up to $80,000 own 80% of negatively geared properties.

This isn’t some tax lurk for the wealthy, rather an incentive for people on low to average incomes. And it has benefits for the broader economy, too. As the report notes, ‘The ability for investors to gear and use debt is a crucial part of investing and fostering economic growth’.

Tinkering with negative gearing would introduce distortions into the tax system and attack confidence, counter to the principles of simplicity and fairness we are seeking to achieve.