The Australian Council of Trade Unions is pushing to limit negative gearing and capital gains tax discounts to just one investment property.

So who stands to win or lose the most if it happens? And is the Albanese government likely to act on the proposal, given Labor has been burnt on the issue before?

Research on Australian housing finance shows negative gearing and capital gains tax discounts were not designed with rental housing in mind – yet this is where they’ve had their greatest impact.

How do the tax breaks work now – and what might change?

Under current negative gearing rules, investors are able to deduct losses incurred from an investment property (such as interest payments and other expenses) against their own taxable income. These can be claimed on an unlimited number of investment properties.

High-income earners tend to have greater incomes to buy properties, and larger tax bills to make deductions against.

With the 50% capital gains tax discount, only half the increase in price of an asset is taxed when it is sold. High-income earners also tend to benefit more from this than low-income earners.

Under the ACTU’s proposal, the current negative gearing and capital gains tax discount arrangements would stay the same for the next five years.

That would give investors time to adjust their property portfolios before a change to only getting tax breaks on a single investment property.

ACTU Secretary Sally McManus put forward the idea at the national economic reform roundtable. She warns continuing to give investors tax discounts to own multiple properties is making home ownership “nearly unimaginable for young people”.

Who would win and lose under the proposal?

According to analysis of the most recent Australian Tax Office statistics from 2022-23 by RMIT researcher Liam Davies, there were 2,261,080 individuals with an “interest in property” – meaning they have an investment in at least one rental property.

Of those investors, 1,117,175 (49.4%) were negatively geared. And of those who were negatively geared, 810,875 have an interest in one property, and 306,300 have an interest in two or more properties.

1 in 7 property investors would be affected by the ACTU’s proposal

Source: ATO Taxation Statistics 2022-23, Table 27

So yes, there would be some losers under the ACTU proposal. About 306,300 out of 2,261,080 investors – 13.5%, or roughly one in seven property investors – would be affected by the new proposed limits. That’s just over 1% of all Australians.

But for the majority of other investors who negatively gear now – 810,875 people at last count – they would continue on with the same tax breaks as before.

What tax breaks cost now – and what they could fund

It’s also worth noting that negatively geared investors “lost” (or claimed deductions for) a total of A$10.4 billion in 2022-23, with $4.8 billion being “lost” by investors with an interest in two or more properties.

The ACTU estimates its change would raise about $1.5 billion in tax revenue each year.

That money could go towards housing in other areas – such as the government’s Housing Accord target of helping finance 40,000 social and affordable homes over the next five years.

We’ve known for years that a tiny fraction of investors actually get the vast majority of these tax breaks.

The Parliamentary Budget Office has reported around 80% of the benefits of the capital gains tax discount go to the top 10% of Australian income earners, while 60% of the benefits of negative gearing go to the top 20% of income earners.

Over the past decade, foregone revenue from negative gearing and capital gains taxation has totalled more than A$80 billion.

Tax breaks that were never meant to work this way

Neither negative gearing nor the capital gains tax discount were initially targeted at rental housing.

Negative gearing provisions actually date back to an unclear loophole in the 1936 Income Tax Assessment Act.

And until as recently the mid-1980s – just two generations ago – there was no capital gains taxation in Australia. Back then, it was much harder for investors to get finance to buy rental properties.

The big change came in 1999, when then-prime minister John Howard acted on a Treasury recommendation and applied a blanket 50% discount to all assets held for a year or more.

At the time, the stated aim was to get more people investing in Australian businesses, such as through the share market. Instead, many people ploughed money into housing and have bid up house prices ever since.

What are the prospects of change?

Within the past year, Labor has repeatedly ruled out changing negative gearing or the capital gains tax discount.

Labor has been cautious about it ever since Bill Shorten’s failed 2019 election campaign, which proposed limiting negative gearing to newly-built dwellings and reducing the capital gains tax discount from 50% to 25%.

But the simplicity of the ACTU’s proposal – and the fact that it would leave the majority of property investors untouched – may make it simpler to implement and also easier to win over voters.

The Greens have already said they back the ACTU’s proposal. So if the Albanese government chose to act, it would have enough support in parliament to pass it.

Public support for limits on how many properties investors can own has also grown in recent years. Gen Z and Millennial voters now comprise almost half the electorate – and their most pressing concern is housing (un)affordability.

Source: https://theconversation.com/how-many-of-australias-2-2-million-property-investors-would-lose-out-under-a-new-plan-to-curb-negative-gearing-262595

Thinking of buying a home? That’s a big step and an exciting one too. But before you start scrolling through real estate listings, it’s important to consider how any debt you are holding will impact your application.

When you apply for a home loan, lenders look at more than just your income. They assess the whole picture to determine how much they’re willing to lend you. One of the key pieces of that puzzle is your existing debt. Depending on what you owe and to whom, it could either reduce the amount you can borrow or impact your chances of being successful in your application.

How lenders decide what you can borrow

Lenders calculate what’s known as your borrowing power. This is the amount they believe you can comfortably afford to repay on a home loan. To figure that out, they consider your income, your expenses, existing debt, credit history, savings patterns, and the size of your deposit. They’ll also take into account the property you’re wanting to buy, the term of the loan, and type of loan.

It all comes down to risk. A lender wants to be confident you can meet your repayments without stretching yourself too thin. And that’s where the type of debt you hold becomes very important.

Some debt is better than others

Not all debt is equal. Some types of debt are seen as manageable or even responsible, while others are not viewed favourably.

Let’s start with personal loans, particularly those used for holidays, weddings or other one-off costs. These are unsecured and tend to have higher interest rates, which makes them less attractive from a lender’s perspective. On the other hand, a car loan that’s secured against the vehicle might be seen in a slightly better light, though it still reduces your capacity to take on a mortgage.

Student debt, like HECS or HELP, is generally treated more leniently because of its income-based repayment structure. But lenders still factor it in when assessing how much disposable income you have.

Credit cards can be especially tricky. It’s not just the balance you owe that matters – it’s the limit. Even if you clear your balance each month, a high limit can work against you because it represents potential debt.

Buy now, pay later services have become increasingly popular, but they also tend to be red flags for lenders. If you’re regularly using these services, it could suggest you’re relying on short-term credit to get through the month.

Then there’s co-borrowed debt, where you’ve taken on a loan with someone else. Even if you’re not the one making the repayments, a lender will still treat that debt as your responsibility. And if you already have an existing mortgage, that naturally has a big impact on what you can afford to borrow next.

Steps to reduce the impact of debt

If you’re keen to strengthen your loan application, there’s plenty you can do. Start by checking your credit report to make sure everything listed is accurate and sort out any errors or unexpected surprises.

Focus on paying off high-interest debt first, especially credit cards. If you can, reduce your card limits or close accounts you’re not using. That alone can make a noticeable difference to your borrowing power.

Try to avoid taking on any new debt in the months leading up to your application. A new personal loan or store finance might seem manageable now, but it could make your finances look more stretched than they actually are.

The goal is to show lenders that you’re in control of your money. That means a steady savings history, low debt levels, and a clear plan for managing repayments once you take on a mortgage.

Remember, debt isn’t everything

While your debt levels play a major role in the loan assessment process, don’t be discouraged if you’re not completely debt-free.

What matters most is how you manage the debt you do have and the steps you’re taking to get your finances into shape. If home ownership is your goal, now’s the perfect time to start managing your debt and building up your financial confidence.

Your future self (with the house keys in hand) will thank you for it.

If you have any questions or need any information please give us a call on 039723 0522.

Spring is set for a bumper selling season

Housing values continued to gain momentum nationally for the seventh consecutive month with an increase of 0.7% according to figures from Cotality (previously Corelogic). This is the strongest gain since May 2024.

Eliza Owen, head of research at Cotality stated that the drivers of the increase in home values is straightforward.

“You’ve got more demand in the housing market, with real wages growth up to its highest level in five years, lower interest rates and more consumer confidence aiding housing purchases,” Ms Owen said.

It appears to be a sellers’ market this spring as home prices are set to continue to rise and fewer properties are being listed for sale. Cotality Australia’s research director, Tim Lawless said “Vendors are in a strong position as we head into spring.”

Growth is set to continue

The interest rate cuts in February, May and August have spurred on buyer demand as borrowers have increased borrowing capacity. “Once again we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values”, said Tim Lawless.

“The annual trend in estimated home sales is up two percent on last year and tracking almost 4% above the previous five-year average. At the same time, advertised supply levels remain about -20% below average for this time of the year.”

The national median house price is now $848,858, up 4.1% over the year. Brisbane achieved the highest monthly growth rate, up 1.2%, while Hobart was the only capital which lost ground, down by 0.2%.

Fewer properties hitting the market

While auction clearance rates rose to 70% in August, the highest since February 2024, there are low levels of properties being list for sale.

Tim Lawless said “We are starting to see the usual start of spring upswing in new listings coming to market, but from a low base. A pick up in the flow of stock coming to market through spring will be good news for buyers who generally have limited choice at the moment.”

Other factors set to boost the market

Market confidence is set to remain as consumer sentiment reached a 3-and-a-half year high in August, core inflation is around the mid-point of the RBA’s target, as well as further interest rates cuts, along with the expansion of the First Home Buyer Guarantee due on 1 October.

“Saving for a deposit is one of the biggest hurdles for accessing home ownership. Saving a 5% rather than a 20% deposit could shave around 10 years off the time it takes to accrue a deposit in an expensive market like Sydney,” Mr Lawless said.

Households are continuing to accrue savings with accumulated savings nearing pre-pandemic levels in March.

Wages growth is another factor that is looking to bolster the market with real wages growth at 1.3% per annum, the highest levels since June 2020.

On the downside

Affordability continues to constrain the market and will keep growth levels steady, along with the pressure on the growth in population which is an ongoing issue with housing supply.

Dwelling values over the quarter

Melbourne

The Victorian capital posted a 1.0% quarterly move according to Cotality figures, taking the city’s median dwelling price to $803,104. Investors should take note that the gross rental yield figure for Melbourne is 3.7%.

Sydney

In the three months to August, Sydney experienced a dwelling value change of 1.7% resulting in a median of $1.224 million. The gross rental yield for the Harbour City remains the lowest of the capitals at 3.0%.

Brisbane

The Queensland capital continues to record the second most expensive spot for dwelling values at $949,583 and a quarterly rise of 3.0%. Brisbane has recorded a gross rental yield of 3.6%.

Canberra

The national capital recorded a rise of 1.5% during the quarter with the median now sitting at $872,957. For Canberra, the gross rental yield is 4.1%

Perth

Perth prices increased 3.1% over the quarter, taking its medium to $841,928. Perth recorded 4.2% gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today.

Note: all figures in the city snapshots are sourced from: Cotality national Home Value Index (September 2025) 

If you have any questions or need any information please give us a call on 039723 0522.

Stay up to date with what’s happened in the Australian economy and markets over the past month.

Consumer sentiment continues to rise after the latest interest rate cut.

A higher-than-expected jump in inflation figures may prompt the RBA to keep interest rates on hold at this month’s meeting

Click here to view our update.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

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Investing isn’t just a numbers game. It’s an activity that stirs various emotions from hope and optimism to fear and anxiety.

Whether the ASX is surging or stumbling, emotional responses to market movements can shape outcomes just as much as economic fundamentals. Understanding those responses is crucial to building resilience, especially in unpredictable times.

These patterns underscore the importance of long-term perspective, especially in a market shaped by both global sentiment and uniquely local factors.

How emotions enter the equation

We like to think our financial decisions are rational, but the truth is more complex. Investors aren’t robots crunching numbers in isolation. We are influenced by news cycles, cultural values and personal stories from friends, family and colleagues.

When markets rise, euphoria and FOMO can drive hasty buying decisions. During downturns, anxiety and regret can push investors to sell at a loss, despite having sound long-term strategies.

This pattern has played out across decades, from the dot-com bubble to the COVID recovery. And remember that emotional investing isn’t just a beginner’s problem. Even seasoned investors can be swept up by sentiment if safeguards aren’t in place.

Psychologists have long observed how financial stress activates similar responses to physical threats, triggering fight-or-flight instincts rather than thoughtful analysis. That’s why even well-informed investors may react defensively when facing market instability.

The good, the bad and the balancing act

Emotional investing isn’t all risk. In the right conditions, it reflects conviction, clarity and purpose. For example, values like patience and belief in the future can help investors stay committed during market dips.

Life changes such as home ownership, welcoming a child or retirement can bring useful emotional clarity to financial decisions. And ethical investing often stems from emotions such as care and connection to community.

When used with discipline, emotions can reinforce sound decisions rather than undermine them. Investors who use emotional clarity to establish long-term goals tend to feel more confident, even when short-term volatility strikes.

That said, emotions can also derail strategy. Panic selling during downturns, overconfidence after gains and herd mentality all pose risks.

The 2022 market correction saw many Australians pull out of super investments prematurely, missing the rebound that followed. These reactions stem not just from fear but also from a desire to act, even when patience may be more effective.

Learning from behavioural finance

Behavioural finance gives us tools to interpret emotional reactions. Biases like loss aversion, recency bias and anchoring affect decision-making in subtle but powerful ways.

These include:

• Loss aversion – People often feel the sting of losses more intensely than the joy of equivalent gains, which can lead to overly cautious or reactive choices.
• Recency bias – Recent events weigh heavily on perceptions, leading investors to expect trends will continue simply because they’ve just occurred.
• Anchoring – Fixating on a past portfolio value or arbitrary benchmark can skew rational assessment.

Recognising these tendencies helps investors avoid knee-jerk decisions and design portfolios that stay aligned with goals over time. It’s not about eliminating emotion; it’s about becoming aware of how it operates and mitigating its effects through smart responses.

After all, markets are always shifting. Emotions will always emerge. The goal isn’t to shut them out, but to understand them and develop structures to keep emotions from steering the ship. When investors learn to pause, reflect and act with intent, they not only improve outcomes but feel more confident in their journey.

If you’d like to explore strategies to build emotional resilience in your portfolio, or tools to help remove bias from investment decisions, please give us a call.

At its latest meeting, the Reserve Bank Board announced it was lowering the cash rate from 3.85% to 3.60%.

What drove this decision?
There are two main reasons:

• Inflation is easing – Prices aren’t rising as quickly as before. The RBA’s preferred measure of inflation is now close to their target range of 2–3%.
• Global uncertainty – Issues like trade tensions in the US could affect economic growth, so the RBA is being cautious.

What’s happening in Australia?

• Inflation: The trimmed mean inflation (a key measure) was 2.1% in June – the lowest since 2021.
• Jobs: Unemployment rose slightly to 4.3%, showing the job market is softening
• Wages: Pay rises are strong, which can push up business costs and slow down how quickly inflation falls.

What does this mean for interest rates going forward?
The RBA is expected to continue lowering rates slowly and carefully. They may cut rates again to around 3.35% by the end of the year if inflation keeps easing and the economy remains stable.

Key takeaways:

• Lower interest rates can help reduce borrowing costs (like mortgage repayments).
• Inflation is coming down, which is good news for household budgets.
• The RBA is being cautious and will adjust rates as needed to keep the economy on track.

Please click here to view the Statement by the Monetary Policy Board: Monetary Policy Decision.

With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.

Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.