I am afraid that google , or was it bing , has led you astray Rattie. Negative gearing was abolished for a short period of time by Hawke/Keating Then Labor bottled it because rents went up in western Sydney , mainly , which threatened a few marginals , and probably unrelated to the change. They then just went back to the previous system which had been there for decades. But at least they had a realistic cgt system in place after that.
Your plan above would not make much of a dent in the amount of properties negatively geared, and there are better ways of increasing housing supply and retirement incomes than pumping money , yet again , into the profits of the housing sector. You still have the problem of people investing in old houses , neutrally geared , because cgt is 50% of tax on income from elswhere. cheers
