More than half of the benefit of the CGT concession went to the top 1% of income earners, the most recent data showsWant to get more charts in your inbox every fortnight? Sign up for The Crunch hereThis year’s federal budget includes changes to negative gearing and capital gains (CGT) and discretionary trust tax con
Capital gains tax and negative gearing benefit the 1% and this chart shows it More than half of the benefit of the CGT concession went to the top 1% of income earners, the most recent data shows Want to get more charts in your inbox every fortnight?
Sign up for The Crunch here This year’s federal budget includes changes to negative gearing and capital gains (CGT) and discretionary trust tax concessions – policies that some blame for fuelling housing speculation and that disproportionately benefit the richest.
The top 1% of lifetime earners alone have received more than $700,000 in tax concessions over their working life from capital gains tax, negative gearing and discretionary trusts, according to figures in the budget.
In 2022-23 – the most recent data – the top 10% of income earners received 83% of the benefit of the capital gains tax concession and 37% of negative gearing. The vast majority of the benefit of both went to people earning above the then median income of $58,216.
View image in fullscreen Illustration: Guardian Design Capital gains taxes are the tax paid on the profits (the “gains”) when you sell an asset – like a house – for a profit. Under changes introduced in 1999, investors get a 50% discount in capital gains tax if they hold on to the asset for more than a year.
Negative gearing (what the Treasury calls “rental loss”) is when an investment property makes a loss – like if the rental income doesn’t pay the mortgage – and the losses are tax deductible against a landlord’s income.
The vast majority of both tax benefits went to those who earn above the median income.
Of the more than 1 million tax filers in 2022-23, just 71% actually benefited from the capital gains tax discount. Almost all of this – 95% – went to Australians earning above the median income.
But even among the better off, there is a huge inequality – more than half of the capital gains tax benefit went to the top 1% of income earners.
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