Secret takeaways 21 out of 100 Australians pay no net tax due to low earnings, offsets, or reductions. Simply 39 people(39% of taxpayers) fund 87%of all income tax, with the leading 3 alone paying
29%. Financiers collectively made $56.2 B in lease, but after costs, earnings was simply $1.6 B (3 cents in the dollar).
Lots of are negatively geared, essentially losing money in the short term however betting on long-term capital development.
Let me present you to a group of 100 everyday Aussies.
They come from all walks of life; teachers, tradies, nurses, small business owners, retirees, professionals, and investors.
Some lease, some own their homes outright, and a few have a couple of investment properties.
Some are just beginning their professions, and others are preparing for retirement.
And thanks to information recently released by the ATO, summarised remarkably by Firstlinks, we can now comprehend exactly who earns what, who pays tax, and who owns the nation’s wealth.
Spoiler alert: it’s probably not who you think.
The majority of Australians pay little or no income tax Here’s the unexpected reality -out of every 100 Australian taxpayers, 21 pay no net tax at all.
None. That may be due to low earnings, offsets, or reductions, but they’re effectively outside the earnings tax system.
Now here’s where it gets truly intriguing:
- The top 3 earners in this sample of 100 pay a tremendous 29% of the nation’s net individual income tax.
- The next 6 individuals pay another 18%.
- The next 30 begin 40% more.
So, that’s just 39 individuals paying 87% of all earnings tax.
On the other hand, those on less than $45,000 a year, which is 40 out of 100 Australians, contribute just 3% of the total tax take.
This paints an extremely clear image: Australia’s tax system is currently highly progressive.
A little part of the population shoulders the huge bulk of the tax burden.
Yet, in political discourse, and increasingly in media narratives, we’re hearing louder calls that “the abundant need to pay their fair share of tax.”
But how much more is “reasonable” when 3% of taxpayers are already funding almost a third of all individual earnings tax profits?
What we need isn’t more punitive taxes, it’s a broader, more productive economy.
We need policies that motivate aspiration, not punish success.
The misinterpreted investor: easy target, tough reality
Let’s turn our attention to residential or commercial property financiers – the group so typically depicted as tax-dodging, rent-hiking villains.
According to the ATO:
- Just 2.26 million Australians own a financial investment home. That’s only about 14% of taxpayers. Or in our 100-person group, simply 14 individuals.
- Of those, 70% own just one home, and less than 1% own 6 or more.
So much for the story that financiers are hoarding all the housing stock.
These 14 investors collected $56.2 billion in gross rental earnings.
Sounds impressive, ideal? However, after representing all costs, consisting of interest on loans, upkeep, insurance coverage, rates, representative fees, and devaluation, they were left with simply $1.6 billion in net income.
That’s less than 3 cents in the dollar in real revenue.
And numerous investors wound up negatively geared, implying they lost money on their homes however hung on for future capital growth.
Far from being greedy landlords, a lot of financiers are simply common Australians attempting to get ahead by handling risk, delaying gratification, providing a service needed by nearly 3 million Australians who rent and betting on long-term property performance.
Superannuation: the looming retirement space
When it concerns retirement preparation, many Australians are simply not prepared.
ATO figures reveal:
- The typical incredibly balance is around $173,000.
- However, the typical balance, implying that half have more, and half have less is just $60,000.
To put it simply, a small number of high-balance accounts are inflating the average, however the majority of people do not have anywhere near adequate conserved for a comfy retirement.
Even if you combine that with the age pension, it’s not going to fund the kind of retirement many Australians aspire to – particularly when living expenses are increasing and individuals are living longer– frequently as much as 30 years after they leave the workforce.
This is why numerous Australians turn to residential or commercial property financial investment.
Unlike super, which is locked away and managed by fund managers, home deals:
- Control over the asset and strategy
- Utilize enabling you to develop a larger base with less capital
- Tax benefits like devaluation and tailoring
- And capital development, which compounds over decades
It’s not best, and it’s definitely not risk-free, but for numerous, it’s the only sensible course to monetary self-reliance.
So … is the tax system broken?
That depends upon who you ask.
Critics argue that the system favours the wealthy, citing unfavorable tailoring, capital gains discounts, and family trusts as examples.
However when you in fact take a look at who’s paying what, you understand that the top end is currently bring most of the load.
The fact is, Australia has one of the most progressive tax systems in the world.
And yet, every couple of years, we get brand-new propositions to “level the playing field” by:
- Capping very balances (e.g. the new 30% tax on revenues above $3 million)
- Cutting unfavorable tailoring
- Reducing CGT exemptions
- Treking land taxes or introducing new home levies
But all these policies have unintended consequences.
They do not simply target the ultra-wealthy.
They also injured the aspirational middle class, the self-funded retirees, the experts attempting to build a portfolio, the mum-and-dad financiers trying to leave the pension.
What’s the alternative?
Instead of taxing the couple of who are already contributing the most, perhaps it’s time to expand the tax base.
That means:
- Encouraging more people to invest, instead of dissuading those who currently do.
- Reforming spending, not simply earnings collection.
- Focusing on economic development, so more people move into higher income brackets and contribute more over time.
Since here’s the truth – relying on a little group to fund the majority of the budget is not sustainable in the long run, particularly in an ageing society with fewer employees per senior citizen and growing social costs.
Final ideas
If you take something away from these 100 Aussies, let it be this:
The people who make the most already pay the most.
Financiers are not the enemy.
And many Australians will never ever construct sufficient extremely to retire comfortably without making smarter choices with their money – which typically includes investing in residential or commercial property.
So if you’re serious about constructing wealth, protecting your possessions, and protecting your monetary future, the answer isn’t to sit on the sidelines or await federal governments to repair it.
It’s to take control, with the best guidance, the ideal method, and the best state of mind.
And that’s precisely what we help our clients do at Metropole– why not have a Complimentary Wealth Discovery Session comes in. We’re offering you a 1-on-1 chat with a Metropole Wealth Strategist to help you:
- Clarify your monetary goals
- Understand how macro patterns affect your position
- Construct a personalised, data-driven property method
- Get ahead of the curve– before everybody else piles in
There’s no charge, no obligation– just practical, tailored guidance based on years of experience.
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< img alt="Cropped Hero Shot Photography 591 1. png" src="https://propertyupdate.com.au/wp-content/uploads/2025/06/cropped-Hero-Shot-Photography-591-1-148x148.png" height="148" width="148"/ > About Michael Yardney Michael is the founder of Metropole Home Strategists who help their clients grow, protect and hand down their wealth through independent, impartial property advice and advocacy. He’s when again been voted Australia’s leading home financial investment advisor and among Australia’s 50 most prominent Idea Leaders. His viewpoints are regularly featured in the media.