Capital gains tax and negative gearing changes are to pass parliament this week after Labor has announced a deal with the Greens in the Senate.
These changes have been facing wide criticism for making it harder for many to break into the property market – one expert is now spotlighting essential female workers and recently separated women could be among those most negatively impacted.
Mortgage broker Rebecca Jarrett-Dalton of Two Red Shoes said many single woman had been relying on affordable property investment purchases to crack the housing market because they could not afford to buy homes to live in.
The new changes have inadvertently created property and financial safety net setbacks for these female workers, many who work essential service jobs such as nurses, teachers, and government workers.
Among the most affected were women navigating a recent separation, with their dreams of a stable family home being pushed out of reach, Ms Jarret-Dalton claimed.
“Typically the client that we see is that single female, she’s left a relationship – she has potentially reduced (working) hours, she has the full cost of running the children,” Ms Jarrett-Dalton said.
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Some experts are claiming the budget tax changes have meant property and financial safety net setbacks for essential women workers including nurses, teachers, and government workers
Ms Jarrett-Dalton said banks often dismissed the true financial strength of this demographic by discounting child support and family benefits.
“She has income types that the banks often don’t accept, for example, single parenting pension is only accepted by two lenders,” she said.
“She has child support payments that are only accepted if they’re paid regularly and on time and we can show six months history. That means she has to wait and (go) through the child support agency.
“The government has not accounted for the heartbeat of our economy: women, mothers and essential workers.”
According to Ms Jarrett-Dalton, due to not being able to qualify for the family house, many women had previously invested in a small unit to not be left behind in the property market.
She said this survival strategy is now under fire, with the government effectively penalising her for trying to build a safety net.
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Rebecca Jarrett-Dalton
“At Two Red Shoes, we see these women every day: they are hardworking, switched-on, and doing everything right to provide for their families,” she said.
“It feels fundamentally unfair that the more they strive to bridge the gap, the more the system moves the goalposts.
“While she works extra shifts or starts a side hustle to cover rising holding costs, she is being treated like a high-end property investor rather than a mother trying to secure her future.”
Ms Jarrett-Dalton said the changes are essentially shrinking borrowing power today while planning to take a bigger bite out of hard-earned equity tomorrow.
“The reduction is between 10 and 20 per cent in terms of what they can now afford to buy in terms of both what the bank will allow them to buy and in terms of the physical holding costs,” she said.
“If she does buy something and then in the future wants to sell it for any particular reason, she’s going to be hit by the CGT changes as well.”
Ms Jarrett-Dalton said the single working mum will be negatively impacted by these changes
This comes amid backlash these changes will leave renters with hefty increases and many first homebuyers still unable to break into the market.
“If the intent is to make more renters first-home buyers, they have to be able to afford the deposit. How many can do that?” Found it head of research Kent Lardner said.
“The reality is that the trend line for wages has been very poor for years, but rents have continued to go up. This has made it harder for renters to become first-home buyers.”
“Young people move out of home, migrants arrive, students rent, people separate, workers relocate and many households are still saving for a deposit,” she said.
“So it is too simple to say one renter becomes one buyer and the problem is solved.”
She added the shrinking rental pool may see more people staying with parents longer, moving into larger share houses, delaying moving out, or accepting longer commutes to find cheaper housing.
Ms Jarrett-Dalton pointed to needing a housing and tax conversation that actually accounts for the reality of solo parenting, rather than one that treats a mother’s retirement fund as just another revenue stream.
She also recommended speaking to a broker to understand where you can get the most for your purchases.
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