Australian Tax Office data shows Australian rental losses

• Australian investment properties recorded a collective net rental loss of $2.7 billion in the 2023–24 financial year.
• The data highlights the financial impact of rising interest rates on property investors, with 54% of investment properties posting a cash-flow loss.
• The figures coincide with federal government plans to restrict negative gearing and reduce capital gains tax discounts.

New Australian Taxation Office data shows that rising interest rates pushed Australian landlords to a collective net rental loss of $2.7 billion during the 2023–24 financial year.

The development marks the first time in four years that the country's overall residential property investment sector recorded an annual net loss, contrasting with the previous year when the sector broke even.

"Why would we do that to people who are looking to accumulate savings and wealth to one day buy a house by the pathways available to them, such as shares?" said Westpac (ASX:WBC) CEO Anthony Miller.

The data reveals that 1.27 million properties recorded a net rental loss, while approximately 1.1 million properties posted a profit or broke even.

The federal government stated that the proposed changes are designed to help 75,000 first-home buyers enter the market over a decade, though Treasury analysis estimates the policy will reduce housing supply by 35,000 homes over the same period.

The federal budget showed that income tax paid by individuals rose to 52.3% of total tax revenue in 2023–24 due to bracket creep and low unemployment.

The ATO data also indicates that 72% of landlords own only one investment property, while less than 1% of investors own six or more rental homes.