A Melbourne investor says he’ll slug his tenant with a $370‑a‑week rent hike as soon as next week if Anthony Albanese pushes ahead with major changes to capital gains tax and negative gearing in Tuesday’s federal budget.
The move would lift the weekly rent from $865 to $1,235 – adding almost $20,000 a year to the household’s bill.
Stephen O’Brien, who rents in Doncaster Heights but owns a coastal investment property interstate, says he’d hit the go button on the increase if the government abolishes the negative gearing tax break.
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His warning lands amid growing speculation that the Albanese government could target property tax concessions in the May 12 budget, despite the Prime Minister previously saying Labor had “no plans” to wind back investor incentives.
Negative gearing lets investors offset rental losses – interest and running costs exceeding rent – against their taxable income, reducing their tax bill.
For example, a landlord earning $45,000 in rent but paying $60,000 in interest, rates, insurance, repairs and maintenance would post a $15,000 loss that can be deducted from their income.
The government is also weighing capital gains tax changes.
Stephen O’Brien says he would lift rent on his investment from $865 to $1,235 a week if changes to capital gains tax and negative gearing go ahead in Tuesday’s federal budget.
At present, Australians who hold an asset for more than 12 months pay tax on only half the profit due to the 50 per cent CGT discount.
Options reportedly on the table include trimming the discount – for example to 25 per cent – or scrapping it and reverting to the pre‑1999 system where gains were indexed to inflation.
On a property bought for $800,000 and sold for $1m after more than a year, investors currently pay tax on $100,000 of the $200,000 gain; cutting the discount to 25 per cent would see $150,000 taxed.
Under indexation, the taxable gain would be reduced by inflation instead.
While landlords can try to pass higher costs through to tenants, there’s no guarantee renters will cop it.
The Albanese government could target property tax concessions in the 12 May budget, despite the Prime Minister previously saying Labor had “no plans” to wind back investor incentives.
As of November 2025, Victoria requires 90 days’ notice, while most other states (NSW, QLD, SA) typically require at least 60 days’ written notice.
Additionally, rent usually cannot be increased more than once every 12 months.
O’Brien says he’s written to Treasurer Jim Chalmers outlining exactly how he’d respond to the changes, but says he’s had no reply.
“Our investment property is on the coast in a high-demand location, within walking distance of a patrolled beach,” he told the Daily Mail.
“I know we can obtain a much higher price. The fact that I can negative gear it with the current rental means everyone wins – tenants and us.
“If there are no deductions, why run my investments at a loss? So who crashes out from Treasurer Jim Chalmers’ reforms? It won’t be me.”
In Australia, notice periods for rent increases vary by state, generally ranging from 60 to 90 days.
Mr O’Brien’s stance has also sparked fierce debate online, with many arguing renters are already at breaking point and that pushing too far risks vacancies if households can’t meet higher asking prices.
“The reality is that rents have been pushed so high that in a lot of areas they have pretty much hit the ceiling in terms of capacity to pay,” one person wrote on Reddit.
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