OECD calls for cap on housing tax break that benefits rich Australians

The Organisation for Economic Co-operation and Development (OECD) is arguing for tax reform to ensure Australian housing isn’t disproportionately in the hands of older, wealthy men.

The OECD has put forward the argument to cap tax breaks in a report which cites senior economist at the Australia Institute, Matt Grudnoff.

He says the top 10 per cent of income earners currently receive 75 per cent of capital gains tax breaks.

“At the moment housing is unaffordable in part because we give big tax concessions to investors, and so when your first home buyer shows up to the auction and some investors show up, they’re getting tax concessions,” he told Neil Mitchell.

“They’re essentially outbidding first home buyers and keeping them in rental properties.

“The answer is to reform those tax concessions.”

The capital gains tax discount is worth about $10 billion a year, and negative gearing is worth another $5 billion.

Press PLAY below to hear why the OECD wants housing tax reform