Real estate expert Tom Panos has criticized the Australian government's recent amendment to tax reforms, alleging it has closed off property investment opportunities for ordinary citizens through self-managed super funds (SMSFs). The government's changes, which are part of a broader overhaul of negative gearing and capital gains tax, are expected to pass parliament this week following an agreement with the Greens.
An amendment to prevent Australians from borrowing through SMSFs to purchase residential property was reportedly introduced to stop individuals from circumventing the upcoming tax changes. However, the government stated these amendments do not alter existing tax arrangements for superannuation or impact current SMSF borrowing arrangements, providing time to finalize ongoing matters.
Panos, a real estate coach, contends that these reforms have directly contributed to a significant slump in auction clearance rates across Australia in recent weeks. He accused the government of limiting access to property investment for individuals such as tradespeople, small business owners, farmers, and "mum and dad investors," many of whom utilize their super funds to acquire business premises. "In many cases, these people use their super fund to buy buildings their own businesses operate from," Panos said.
He further expressed concern that the government's willingness to change rules on a popular long-term retirement strategy could create uncertainty for future investments. "Whether you support the policy or not, Australians are looking at this and you know what they're asking? Why would I take risks? Why would I invest?" he added. The property industry, according to Panos, views these changes as a direct blow to investment confidence, anticipating a worsening market situation.
Property investor Jack Henderson echoed these sentiments, stating that "the old mum and dad investor has just been f[expletive]ed again." Henderson believes the changes will further limit "normal mum and dad property investors, or investors in general." He suggested the move is politically motivated, aimed at keeping superannuation funds within industry funds controlled by unions.
Official figures indicate a sharp decline in market activity. Combined auction clearance rates in capital cities fell to 47.4 percent last Saturday, marking the lowest level since the early stages of the COVID-19 pandemic in 2020. Sydney and Melbourne, Australia's largest cities, recorded their weakest auction results in years, while Brisbane has seen clearance rates below 50 percent for five consecutive weeks.
Panos described the market downturn as a warning sign, noting that a significant portion of auctions were withdrawn and nearly half of successful sales occurred before auction day. He projected that actual auction clearance rates could drop into the low 40s once finalized.
Housing Minister Clare O'Neil acknowledged that the flagged tax reforms have played a role in the lower clearance rates. However, she asserted that property prices are expected to resume growth after the market corrects itself from a period of "extremely high house price growth" seen since COVID-19. O'Neil noted that while interest rates are an immediate factor affecting borrower capacity at auctions, the tax system also contributes to market dynamics.