Governments vested interest in maintaining property price growth Investopoly

There are many large and powerful institutions that have a vested interest in rising property prices. But all levels of government (i.e., federal, state and local) probably have the most to gain, as I’ll explain in this blog. This leads to two important observations. 
Firstly, the government is the main contributor to housing affordability pressures i.e., making housing less affordable. 
Secondly, government tax revenues are dependent upon rising prices and demand for property. I don’t want to debate whether this is right or wrong. I’m merely interested in highlighting economic and financial reality, as I think it’s helpful to inform personal investment decisions. 
The federal government revenue
The negative gearing tax break afforded to property investors has been widely debated since it was introduced in 1985. You will recall that Bill Shorten proposed to remove negative gearing in his unsuccessful federal election campaign in 2019. But its only half of the tax story.  
Using ATO data for the 2019/20 tax year, it appears that property investors claimed circa $728.5 million dollars of negative gearing income losses. But this is dwarfed by the taxable capital gains that taxpayers declared in the same year of over $20 billion. Of course these gains come from many sources (not just property investments) including share investments, sale of businesses, and so on. But property is a lumpy asset, so it tends to give rise to large CGT liabilities. Unfortunately, more granular information was unavailable. 
I’ve said in this blog many times, the most efficient way to build wealth is to invest in properties that have the attributes to drive strong capital growth over the long run, even if they produce a negative cash flow (because the rental yields are low). The wealth accumulating power of compounding capital growth will eventually dwarf any negative cash flow. 
The same is true when it comes to federal government tax revenue. The government generates a lot of (CGT) taxation revenue from rising property prices. 
State government tax revenue is highly dependent on property 
Australian states and territories generate two main taxation revenue streams from property, being
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