Property guru Tom Panos has floated a provocative theory that the federal government may be deliberately pushing home prices down before a crucial tax date.
“I’m about to say something really controversial,” The Block auctioneer and real estate coach said in a market update on Friday.
“At first I thought it sounded like a conspiracy theory, now I’m not so sure.”
From July 1, 2027, Mr Panos said, the capital gains tax (CGT) system would change, with the 50 per cent CGT discount replaced with indexation and a 30 per cent minimum tax rate for established residential investment properties.
“The value of an investment property on that date effectively becomes the dividing line between the old CGT and the new system,” Mr Panos said.
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“That valuation could be worth an enormous amount of money. Because the lower your property is valued on the July 1, 2027, the more future growth could fall into the new tax regime if property prices recover.”
Mr Panos suggested that the government was actively trying to keep house prices down ahead of that date, so that it could increase CGT revenue during future growth in the property market.
“So here’s the question nobody seems prepared to ask: Does the government actually have an incentive to see property prices pushed down before valuation day?” he said.
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“Look at what’s happening. Policies discouraging everyone to buy, changes to negative gearing, the removal of the CGT discount, a 30 per cent minimum tax on real capital gains, and the government language that almost celebrates property prices falling.
“Individually, every policy comes with an explanation. But (add) all the pieces together and a disturbing picture begins to appear.
“Drive property prices down before July 2027, lock investors into lower starting valuations; then when the market eventually recovers, capture a bigger share of that future growth through capital gains tax.”
Mr Panos conceded that he could not prove that this was the government’s strategy.
“But governments understand tax revenue, they understand valuations and they certainly understand how cycles work,” he added.
Budget about helping young Aussies – Chalmers
Mr Panos’ message came as capital city house prices were down 3.6 per cent from their peak amid an ongoing correction, widely attributed to the tax reforms and higher interest rates.
The biggest falls were in Sydney (6.3 per cent) and Melbourne (5.9 per cent).
Ahead of the May budget that included sweeping property tax changes – restricting negative gearing to new builds and replacing the capital gains tax discount – Treasurer Jim Chalmers said they would not be a major revenue-raiser.
“People shouldn’t expect there to be this huge amount of new revenue show up over the course of the next few years in the budget,” Mr Chalmers said at the end of April.
Post-budget, he argued the changes would level the playing field by stopping investors from outbidding first home buyers for existing homes.
Mr Chalmers claimed the tax reforms would help 75,000 young Aussies to achieve home ownership over the coming decade.