‘Dangerous’ tax plan could make renting worse, warns Tom Panos – realestate.com.au

A battle has erupted over the future of Australia’s property market, with an industry insider warning a proposed overhaul of tax credits could be catastrophic for vulnerable renters.

In a clash on Sunrise, prominent property auctioneer and real estate trainer Tom Panos sounded the alarm over proposed changes to capital gains tax credits.

Under the current tax regime, investors who have held their assets for more than a year can get a discount on the amount of capital gains tax. The tax is currently in the spotlight following calls for reform from Labor backers at the Australian Council of Trade Unions.

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Investors often compete with first-home buyers at auctions, but capital gains tax rebates only come into play once the investors sell. Photo: Tom Parrish

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Mr Panos said removing tax incentives for investors would fail to solve the housing crisis and instead stifle rental supply. The result would be that tenants would have to pay sky-high costs.

Tampering with the CGT discount would be a dangerous gamble, rather than creating a level playing field between first home buyers and investors.

“If you take away the attractiveness for people to invest in real estate, you take real estate investment out of the picture,” Mr Panos told Sunrise.

“Fewer rental properties mean more demand from tenants, which means higher rents.”

Mr Panos said the victims of this policy change would not be the rich, but “the most vulnerable group of people in society. And those are the tenants”.

The debate intensified when Greens Senator Nick McKim branded the current CGT rebate as an ‘unfair’ tax break that costs the budget billions a year and mainly benefits wealthy Australians.

Prime Minister Anthony Albanese’s union supporters have called for a switch to CGT. Photo: NewsWire / Martin Ollman

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Mr McKim said it is unfair for workers such as nurses to pay more in taxes than someone who “sits at home investing in investment properties”, but he did not clarify how current tax institutions allow this.

This claim was rejected by Mr Panos, who said investors were being stereotyped as tycoons driving luxury cars, when in reality most were middle-income families preparing for retirement.

“We’re not talking about people like Adrian Portelli running around in a Maserati with a lot of property,” Ms Panos shot back.

“We are talking about mothers and fathers who have chosen investment properties as financial security for their children.”

Mr. Panos said 75 percent of investors owned just one property, citing his own experience selling homes to nurses and teachers trying to diversify their savings.

Beyond the tax debate, Mr. Panos argued that the government was pulling the wrong levers.

He criticized “fiddling with taxes” or introducing 5 percent deposit schemes, claiming these only drove prices higher without addressing the root cause of unaffordable prices: a lack of supply.

The auctioneer called for a “broader discussion” that focuses on reducing red tape, repurposing and migration.

He suggested that policymakers consider “making migration happen at the same pace as real estate construction, because that is another problem we face.”

Without addressing supply, changing the tax code was just a superficial solution to a deep-seated structural problem, Mr. Panos added.

Senator Nick McKim said the tax credits were unfair. Photo: Martin Ollman

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Senator McKim has pushed back on fears of a rent impact. He argued that if tax breaks for speculators were restricted, more investors would sell. Tenants could then buy more shares.

“That would level the playing field,” McKim emphasized, adding that it would reduce competition from buyers.

This claim was disputed by Sunrise presenter Natalie Barr, who suggested that many investors could hold on to their properties for much longer if they had to pay more capital gains tax after a sale.

Mr Panos said Australia already has one of the highest capital gains tax rates, even with the current rebates.

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