Negative gearing is set to cost the federal budget almost $100 billion over the coming decade, according to new modelling.
Analysis by the Parliamentary Budget Office, requested by the Greens, estimates it would cost $96.7 billion in the 10 years from 2023/24.
The budget office forecast the tax concession would set the budget back by $7.5 billion in the next financial year, with the yearly amount of foregone revenue expected to reach $12.6 billion by 2022/23.
The modelling also showed discounts on capital gains tax would cost the budget $60 billion over the same 10-year period.
The analysis was based on the assumption of the official interest rate being set at 2.85 per cent.
However, further rates rises are expected in coming months as the Reserve Bank attempts to curb inflation.
"This analysis looks at the impact of changing cash rates, but does not factor in broader economic impacts that occur alongside rising interest rates," it said.
"There is significant uncertainty around what the economy-wide impact would be under the different scenarios."
The analysis showed 85 per cent of CGT discounts would go to the top 10 per cent of income earners, and 56 per cent of the two concessions combined would go to the top 10 per cent of earners.
Greens housing spokesman Max Chandler-Mather said the figures reinforced the need to scrap the concessions.
"The higher interest rates go, the more negative gearing will cost the budget," he said.
"At the time when the government needs extra revenue to help alleviate the cost of living crisis, they are instead handing it over in the form of tax concessions to wealthy property investors."
