Residential real estate abounds with myths and misconceptions,  most of them perpetrated by politicians and others with a vested interest in having people believe something that’s not true.

The greatest fallacy of all is that property investors are a privileged class with massive tax and other advantages that distort the market and cause problems like poor affordability and the rental shortage.

In reality, the opposite is true.

Property investors are seriously disadvantaged and discouraged in so many ways, 

that more and more of them have opted out of owning investment properties, which is why we have a chronic shortage of rental properties.

The fallacy about property investors having big tax advantages which should be disallowed was repeated recently by Everybody’s Home, a coalition of organisations which includes The Salvation Army and National Shelter, which proposed the rather horrifying scenario that everyone who rents would be living in social housing.

Under their proposition, private renting would no longer exist and the one-third of Australian households that rent would be living in social housing.

Given that 90% of the dwellings that people rent currently in Australia are provided by private mum and dad investors, this is a rather radical nation-changing quantum shift in the real estate landscape.

Everybody’s Home justifies this wacko idea by claiming that property investors are massively advantaged by negative gearing and a capital gains tax concession.

But the opposite is true. Relatively few property investors access negative gearing benefits 

and there is NO capital gains tax concession – just a method of calculating capital gains tax 

which is an impost paid only by investors, not by home owners.

Indeed, capital gains tax is one of many examples of ways in which property investors are quite seriously disadvantaged.

Investors pay taxes that home owners don’t pay, namely capital gains tax and also land tax, which increasingly is a major deterrent to investment.

Some states, such as Victoria, have introduced new taxes and charges to further alienate investors and make the rental shortage worse in that state.

Investors also pay higher interest rates than home buyers, although there’s no practical reason why that should be so. Investors also pay higher council rates than home owners and higher rates of insurance than home owners.

Indeed, the system is so loaded against property investors it’s miraculous that anyone would undertake is at all.

And, in fact, it’s that very long list of factors where property investors are disadvantaged 

that has created the worst rental accommodation shortage in the nation’s history.

But if the disconnected individuals at Everybody’s Home have their way, it will become immeasurably worse.  There will be no private rentals at all. 

Everyone will be renting from the government or from international corporations.