Negative gearing should be abolished and the billions in savings used to help house Australia's most vulnerable, deputy Greens leader Scott Ludlam says.
The Greens are proposing to end the scheme on future new housing investments by July 1 so people who have already structured their finances around it are not penalised.
Mr Ludlam said negative gearing had comprehensively failed to increase the housing supply and had instead distorted the market and pushed out first home buyers.
"The overwhelming majority of negatively geared properties are ones that investors have bought, they haven't built them," Mr Ludlam said in Perth on Sunday.
"We've got no problem at all with property investment it's just that people shouldn't be forced to subsidise it through their taxes."
The Greens proposal, which has been costed by the independent Parliamentary Budget Office, argues abolishing negative gearing would save $2.9 billion by 2020.
Over 10 years, the savings would amount to $42.5 billion.
Mr Ludlam said a substantial part of that money should be invested in new housing, taking 15,000 families and individuals off the social housing waiting list in the same period.
The money would also fund the construction of 7000 new homes for the homeless.
Labor has previously said it would have a look at the issue of negative gearing.
But senior Labor frontbencher Anthony Albanese said you also have to look at the supply side of housing and not just tax.
"You would have to look as to whether any changes would have an impact in terms of supply, in terms of investment in housing," he told Sky News.
Another opposition frontbencher Mark Butler said Labor is in discussion with housing experts and academics on how to improve housing affordability.
Property Council of Australia boss Ken Morrison said the Greens' proposal is "dangerous" and would make housing affordability worse.
"Removing negative gearing would put the brakes on the supply of new housing and ... drive prices higher for both renters and home owners," Mr Morrison said in a statement.
But Bank of America Merrill Lynch chief economist Saul Eslake said there was a lot to like about the plan.
"I've long argued that negative gearing costs a lot revenue and does not do what its supporters claim it does," he told Sky News.
He said more than 90 per cent of geared investment goes to established properties and overwhelmingly inflates its price rather than adding to the stock of property.
The proposal come just days after Treasury boss John Fraser said that Sydney and wealthier parts of Melbourne are "unequivocally" in a housing bubble, a situation Tony Abbott has played down while accusing Labor of trying to talk down the housing market.
Mr Butler said the prime minister has responded in the "glibbest possible political terms".
Assistant Treasurer Josh Frydenberg told ABC TV that housing prices have gone up but "went up higher in the early 2000s".
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