Government proposals to overhaul tax settings for property investors at a time of global economic turmoil could drive a 30 per cent spike in rents over the next two years, a major real estate boss has warned.
It comes as Treasurer Jim Chalmers has been reported to be exploring tweaks to capital gains tax discounts and negative gearing in the upcoming May federal budget.
The changes would likely remove some of the generous support offered to property investors, most notably a discount on the amount of capital gains tax charged on those selling rental homes.
Nathan Birth, the head of property management firm Blink, which manages close to 7,000 rentals across the country, said the timing of such tax changes could be catastrophic for tenants.
He explained that removing the support would result in a swift reduction in rental supply as marginal investors cashed out of the market ahead of any changes.
Binvested founder and director Nathan Birch said the changes would “scare” some investors.
This would be problematic for the rental market given still elevated levels of migration, which would mean more tenants competing over fewer properties. The result would be increases in rents, Mr Birch said.
“These changes will scare a lot of investors into selling,” he said, noting that many landlords were already considering selling up due to the tense economic environment.
“It’s poor timing … it would be a massive shock to the market and the average tenant would struggle,” he said.
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Mr Birch said proposed changes could deliver a similar result to when capital gains tax was first introduced in 1985-1987. This change coincided with the Hawke government temporarily abolishing negative gearing.
The twin reforms drove a circa 30 per cent rise in rents in some capital cities over the two years.
Mr Birch, who is also a notable investor who owns 350 properties and owns the financial group Binvested, said he personally did not fear the changes as they would give him an opportunity to raise rents.
“I am excited. Take negative gearing way, tweak CGT, and it means I can push the rent up,” he said.
“People say this will affect ‘greedy’ investors … the worst affected people will be average renters, people just surviving on one income, who are in areas where there is little (rental) supply.”
Mr Birch said there were many reasons to expect tax changes to launch a large-scale sell off of investment properties, along with a sustained reduction in new investor purchases.
“Less people will want to buy, and there will be investors who hear a lot of noise in the market, get scared, and decide to sell.
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Treasurer Jim Chalmers has yet to confirm if the tax changes will go ahead. Picture: Martin Ollman
“We should be building more. That’s the way out of this situation, but building costs are going to rise. It will become even more expensive to build new housing and we may see some developers going bankrupt.
“With migration still putting pressure on the rental market, all it takes is a bit of stock to dry up for prices to go up again.”
The Albanese government has yet to confirm if any potential changes to capital gains tax charges will occur, but the treasurer has told media he would be “happy” if the Budget was noted for “tax reform”.
Capital gains tax is a levy applied to the profits after selling items, like shares or property, and is part of a person’s annual income tax.
Mr Birch said the government tax reforms would be poorly timed given current economic turmoil and still elevated migration. Picture: Martin Ollman
Under current settings, a discount of 50 per cent is given if someone has held the asset for more than a year.
Supporters of tax reform have argued that capital gains tax discounts, coupled with negative gearing, have encouraged speculation in the housing market, which has driven up prices.
Current tax settings have also created an incentive for landlords to borrow as much as possible against their properties, critics of the current policy have argued.
This article was originally published on 8 Apr 2026 at 5:00am but has been regularly updated to keep the information current.
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