Nathan Birch of B Invested Australia said to change CGT discounts would be “political suicide”.
One of Australia’s biggest property investors has moved to reassure others that no government will ever slash CGT discounts, warning it would be ‘political suicide’ and worsen affordability.
As pressure mounts to reform housing tax breaks, Nathan Birch of B Invested Australia – who has a $100m personal portfolio and 350-plus properties – warned any moves to slash capital gains tax discounts would backfire spectacularly on any government that tried it.
His media statement issued Monday said “no government will ever slash capital gains tax … Labor slashing capital gains tax would be ‘political suicide’.”
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Mr Birch said removing CGT discounts would remove properties from sale rather than improve affordability.
The investor who hosts the popular ‘No B.S with Birchy’ podcast said he had helped over 1,700 people build their own property portfolios, warning that any slash to CGT would remove homes from the market rather than improve affordability.
“The only likely outcome of slashing the capital gains tax would be to see far less properties on the market,” he said. “With an ongoing influx of migrants coming into the country to compete for available stock, Australians will still not find it easier to enter the market – in fact, this scenario will only push prices up.”
He said changes to CGT could force investors to hold properties longer to avoid the tax, removing stock from the market at a time when supply is already constrained.
Mr Birch said “personally, any changes to capital gains tax won’t affect me as I am a buy and hold investor. I buy positive cashflow properties which put money in my pocket each week so am not affected by negative gearing, however I don’t like that any changes may force other investors to hold onto properties longer so they don’t have to pay the tax and this will take stock out of the markets.”
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B Invested founder Nathan Birch has over 350 properties, and says he won’t be affected if rules change because his strategy is buy and hold.
His comments come as Prime Minister Anthony Albanese faces renewed pressure over housing affordability across the country.
“We’ve seen this happen many times before an election, a push to slash negative gearing and the capital gains tax, but it’s the wealthy that are the ones that will protest and lobby against this and they are always successful in doing so,” Mr Birch said.
He said “although entities such as the Australian Council of Trade Unions are lobbying for the capital gains tax discount to be cut in half from 50 per cent to 25 per cent, their argument that this concession is driving up property prices is flawed”.
Mr Birch said changing CGT discounts “won’t change anything, it will only be giving more revenue to the government” which he blamed for large spending programs impacting inflation.
“With more money, they may simply end up spending more,” he said.
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A Senate select committee is currently conducting enquiries over the issue and is due to report on CGT feedback next month.
Mr Birch was also critical of the government’s continued high migration levels which he said was a key factor in housing stress.
“The government is under a lot of pressure with current inflation and the high cost of living, however they keep bringing in migrants at a rate of 2000 a day because they need the tax dollars, and they also rely on the revenue they make each time property transacts on the market.”
Meanwhile, an Anglicare Australia report claimed 80 per cent of the $23.7 billion capital gains tax discount flows to the wealthiest 20 per cent of households.
The report said that in 2022-23, the wealthiest 20 per cent of households received more than $19 billion from the CGT discount, while the bottom 20 per cent received just $470 million. The organisation has called for the CGT discount to be phased out, with revenue redirected into public and community housing.
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