THE Federal Government is warning Perth property investors that they will be “punished” by Labor’s changes to negative gearing, with some of the biggest losers in seats the ALP needs to win to take power.

In a clear bid to protect a string of seats across Perth that could be lost at the next election, Federal Treasurer Josh Frydenberg said up to 170,000 ordinary West Australians could be hit by Labor’s changes.

While the largest number of people who negatively gear their investment properties are in Liberal-held seats, there are more than 30,000 investors in the Labor Federal electorates of Perth, Fremantle and Burt.

There are more than 9400 investors in the seat of Cowan which is held by Labor’s Anne Aly by just 0.7 per cent.

Labor is going to the election promising to restrict negative gearing — the ability to offset a person’s tax bill through losses on a rental property — only to new properties. People who currently negatively gear a property will not be affected. It also planning to halve the 50 per cent capital gains tax concession introduced in the late 1990s.

But Mr Frydenberg said the policies would particularly hit the Perth market where house and unit values have fallen 3.3 per cent over the past year.

“Labor’s property tax will punish every West Australian with equity in their home,” Mr Frydenberg said.

The largest number of pro-perty investors are in the Liberal-held seat of Durack with almost 14,500.

The biggest losses claimed by investors, however, are in Liberal MP Julie Bishop’s seat of Curtin with an average tax loss of $14,124 which is the second largest of any in the country.

Shadow treasurer Chris Bowen said the Government was trying to scare people even though house prices in Perth had been falling on their watch.