Treasurer Scott Morrison says a new analysis shows Labor's planned changes to property investment tax concessions will favour the wealthy over low and middle-income earners.
But shadow treasurer Chris Bowen has dismissed the findings as "completely contradictory" to what the treasurer has said in the past.
Labor will limit negative gearing to investment in new properties should it win the July 2 election, although those with an existing investment property can continue to claim tax concessions until they sell.
Mr Morrison has released an Australian Taxation Office analysis of negative-gearing data which he says shows wealthy investors will be least affected by the change.
Under what he labelled Labor's "housing tax" investors could not negatively gear against salary and wage income unless they purchase a new home, but they can still use negative gearing to reduce their tax on income that comes from investments such as share dividends and bank interest.
Investors earning more than $100,000 will continue to claim nearly 90 per cent of their net rental losses against their investment income, yet middle and low-income earners only have enough investment income to claim less than one quarter.
"Nobody expected Labor to develop a policy that favours the wealthy over middle and low-income earners," Mr Morrison said in a statement.
Mr Bowen labelled the claims another "ridiculous and shrill" scare campaign that contradicted the treasurer's previous arguments.
"For months he's argued that high-income earners aren't the major beneficiaries of negative gearing in Australia," he told reporters in Sydney on Monday.
Mr Morrison fired back by calling out Labor's hypocrisy on the issue, citing opposition frontbencher David Feeney's failure to declare a $2.3 million negatively-geared property in his inner-Melbourne electorate.
"I'm not surprised Chris Bowen wants to talk about things other than David Feeney," the treasurer told reporters in Sydney.
"Preaching and lecturing against wage-earning Australians on negative gearing ... while at the same time their policy is supporting those with big investment incomes like David Feeney."
