Anthony Albanczyk could be set to realize huge tax savings of nearly $90,000 if he rents out his new $4.3 million waterfront mansion for $1,300 a week, economic analysts said.
It was revealed on Tuesday that the Prime Minister is the new owner of a five-bedroom house in Copacabana, south of Avoca on the New South Wales Central Coast.
Albanese will share the $4.3 million clifftop home with his fiancée Jodie Haydon, whose “Coastie” family has lived in the area for several generations.
The prime minister insisted he had no plans to move into the property anytime soon, telling reporters he would remain in his “current position for a very long period of time.”
This increases the possibility that Mr Albanese will choose to rent a property if re-elected next year and continue to live in taxpayer-funded housing in Sydney and Canberra.
According to an economic model developed by tax consultancy group MCG Quantity Surveyors, under such a scenario the prime minister could take in an estimated $1,300 per week while still being able to write off tens of thousands from his tax bill.
MCG, which was not involved in the sale of Mr. Albanese's home, calculated that he could gain up to $87,000 a year under the negative leverage license.
This would, of course, be extremely controversial, given that Albanese has not ruled out changes to tax relief for investment properties.
Albanese will share this $4.3 million clifftop home with his fiancée Jodie Haydon, whose “Coastie” family has lived in the area for several generations (the couple is pictured together)
Negative gearing occurs when investor-owners can deduct the rental loss from their taxable income.
Even if they don't make a loss, they can claim expenses related to interest, utilities and property maintenance to reduce their overall taxable income.
This is estimated to cost the annual federal budget approximately $18.6 billion.
In Albanese's case, much will depend on how much money he borrowed to buy his beachfront mansion and whether he bought the property in his own name or through a trust.
The MCG model was based on an estimate of the amount of rent the property could attract of $1,300 per week, and also took into account Prime Minister Albanese's salary of approximately $607,500.
Other expenses are also included, such as annual utility rates of $5,300, as well as projected property management and maintenance fees.
These expenses were then capped using the typical interest rates charged on home loans by large lenders.
MCG analysts predicted that if Mr. Albanese used the 20 percent deposit on the property combined with the initial interest-only loan term, he could receive tax savings of $87,000.
However, if he made a larger deposit of 50 percent, his tax benefits would be about $46,500.
Albanese's decision to buy a multi-million-dollar mansion amid a housing and cost-of-living crisis was branded “tone deaf” by his critics.
He admitted he had a “good income” as prime minister, but insisted he had not always been so lucky.
“I also know what it's like to fight,” he told reporters on Tuesday.
The Prime Minister is the proud new owner of a five-bedroom house in Copacabana on the New South Wales Central Coast
The house is located on a cliff top, on a plot of 790 m2, a short walk from the beautiful beach
“My mother lived in the only public accommodation (apartment) where she was born for all her 65 years.
“I know what it's like, so I want to help all Australians find a home, whether it's public, private or freehold.”
However, his attempts to portray himself as a man of the people failed miserably with News from Heaven host Peta Credlin, who accused Albanese of “sounding tone deaf”.
“Or she has been living in this housing commission house (which she often talks about) longer than ever,” she wrote on social media.
“And frankly, people struggling right now are fed up with the way he uses this story to show empathy when what matters is what he does in the most important job in the country.”
However, the Prime Minister was defended by other Labor ministers such as Clare O'Neill, who insisted he was “about to start a new life with his amazing fiancée”.
“This man leads an Australian government that has been more bold and ambitious in addressing Australia's housing needs for many decades,” she told Seven's Sunrise on Wednesday.
“I understand the concern, but we are trying to address a housing issue that affects millions across the country.”
But behind the scenes, MPs gave a very different verdict – one Labor MP told the Sydney Morning Herald he was “gobsmacked” and another described the timing of the purchase as “bloody awful”.
The cliff house sits on a 790 m2 plot, a short walk to an idyllic beach, with ocean views from almost every room in the house.
Mr. Albanese's new five-bedroom home offers views of the Pacific Ocean from almost every room
Having grown up in council housing, Mr Albanese now owns an impressive property portfolio.
His other assets in Sydney's west include a three-bedroom townhouse in Dulwich Hill and a Federation house in Marrickville.
This does not include free accommodation at The Lodge in Canberra and Kirribilli House in Sydney.
Opposition Leader Peter Dutton couldn't call the Prime Minister out of touch given that he himself had a property portfolio that was being valued for $4.5 million by Daily Mail in 2022
“They are clearly planning the next phase of their lives, post-political, and I wish them all the best,” Dutton said.
This is Australian home owners who I worry about – people who can't afford their mortgages.
