Official modelling shows negative gearing and capital gains tax discounts will cost the budget $20 billion a year within a decade. 

Modelling by the independent Parliamentary Budget Office (PBO) estimates that negative gearing would drain $12.7 billion from budget revenue in 2023-33 at the current cash rate of 2.85 per cent.

If the cash rate rose to 3.35 per cent - near the Reserve Bank of Australia's estimate of a longer-term “neutral” cash rate - that cost would blow out to $13.8 billion.

The PBO says allowing loss-making property investors to write-off those losses against their other income cost the budget around $3.8 billion in forgone revenue last year. 

The capital gains tax (CGT) discount cost the budget around $4.7 billion last financial year.

Combined with the capital gains tax discount, these property investor tax concessions are tipped to top $20 billion a year by 2032-33. 

The modelling also reveals that 39 per cent of negative gearing benefits go to people earning more than $129,200 a year - the top 10 per cent of income earners. 

The bottom 50 per cent of income earners - those on less than $51,500 per year - accounted for less than 4 per cent of revenue lost to the CGT discount and less than 16 per cent of negative gearing benefits.

Critics say that these offsets and discounts promote inequality by making it easier for a property investor to buy their fifth house than for someone to buy their first home.