The Property Investors Council of Australia has launched a fresh attack on Labor four days out from the election, releasing new research which it says shows investors are already paying "well above their fair share" in taxes.

Labor has vowed to reform negative gearing if elected on Saturday, also promising to half the 50 per cent deduction on capital gains allowed across asset sales.

The party has said the country's "generous" property tax concessions meant that first home buyers were "being locked out of the housing market".

But PICA chairman Ben Kingsley said the council’s modelling showed an average Mum and Dad investor was adding hundreds of thousands of dollars to the public purse over the lifetime of a single investment property.

“The amount of federal taxes property investors pay is extraordinary and will surprise many – and that’s before state based stamp duty and land tax costs are included, adding tens of thousands of dollars more to the bill,” he said.

“It is clear that property investors do pay well above their fair share in taxes and our concern is that impost on investors is set to blow out even further if Labor’s policies see the light of day.”

Related Reading: Policy makers must be ready to 'step up', says Property Council

The PICA figures are based on current negative gearing and CGT rules assuming assets were held over a standard 30-year loan term.

Mr Kingsely said the numbers show that while a typical Australian investor benefitted from negative gearing initially, they would be taxed around $167,000 in subsequent years over the full 30 years of modelling,

“Net tax payable from rental income over the life of the investment will be over $138,000 under current negative gearing rules," he said 

“The initial tax benefit in this scenario is around $30,000, before paying the $167,000 over the journey.

“If you think about what first home buyers get in grants, stamp duty concessions and the like, it’s very comparable to what investors receive, but investors have to pay a lot more additional tax when homeowners pay nothing more.”

In terms of Capital Gains Tax, the PICA data showed that if the average couple sold an asset in the 30th year under the current 50 per cent exemption rule, they would be paying over $611,000 in CGT.

Mr Kingsley said if Labor won power on Saturday, it wouldn't be the wealthy who funded its election promises.

“With the majority of the nation’s 2.2 million property investors earning less than $80,000 a year, Labor’s claim about tax loopholes being for the big end of town are, frankly, insulting,” he said.

“It’s totally deceptive to characterise landlords as ‘the big end of town’ in the lead-up to election day.”

“By releasing this data, we want the Australian public to understand that we certainly pay our way when it comes taxes for government to spend on more hospitals and more schools,” he said.

By Sean Slatter

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