Figures from the Australian Taxation Office crunched by the Property Council – advocates of negative gearing – show almost half a million Victorians own a residential investment property. Of those 500,000 investors, about 311,000 negatively gear. This is out of about 3.3 million taxpayers in the state, suggesting about one in 10 taxpaying Victorians use negative gearing.

About 207,000 negative gearers earned less than $80,000, according to the Property Council, and about 24,000 were under 30 years old.

The figures follow a report by KPMG Economics released on Tuesday, analysing data over 20 years, which showed even Australia's poorest are jumping on the negative gearing bandwagon, despite their inability to manage the risks.

"It seems that once you're hooked on the drug of investing in property, you want more and more," KPMG chief economist Brendan Rynne told Fairfax Media. "Any increase in our historically low interest rates would cause serious problems given the growth of outstanding residential loans over the past decade."

But Sally Capp, executive director of the Property Council in Victoria, said the risk-weighted average return over the past 20 to 30 years has made property the best performing asset class.

"So if you're going to have an asset and one day you find that you can't continue to hold it, at least in the current market you've got confidence you will be able to sell, pay your debts and try something else," Ms Capp said.

"The fact that so many people in lower incomes brackets are doing things to try and create wealth, I think that's a great sign. Whether that type of wealth creation is right for them at this time, that's debatable, and maybe that's what needs to be looked at further.

"We would never want to get to a point where we are regulating the decisions people make, they will make mistakes."

Ms Capp said the data showed the average deduction for negative gearing by a Victorian resident was $8621, proving the tax mechanism was not simply "a tool of the ultra-rich".

"We're not seeing negative gearing used for wildly expensive properties with lots of ongoing costs," she said. "The amount of deductions seems very reasonable and affordable ... It shows this isn't about gauging, we're not seeing gauging of negative gearing, we're seeing what would appear to be entirely reasonable use."

Analysis by Fairfax Media, following the release of the ATO figures last week, showed the top occupations with the highest proportion of negatively geared properties were policy and planning managers, anaesthetists, surgeons, senior non-commissioned defence force members and school principals.

The Property Council has refuted claims negative gearing drives property prices up, advocating instead for more measured supply of housing to the market.

"We believe that as community for us to ensure affordability and a reasonable growth – whatever reasonable is, and that depends from time to time – the largest impact on managing that is the supply side, it's not about trying to control the demand side," Ms Capp said.

"We don't think negative gearing is a major cause and you can see that from this data. We're talking about almost 10 per cent of the taxpayers in in Victoria – that's a nice chunk, but its not so compelling that you'd think that's having a major impact on our property prices."

The issue continues to prove to be a political football for the federal government and opposition, with Treasurer Scott Morrison kiboshing any changes to the tax concession in May's federal budget.

Meanwhile, opposition leader Bill Shorten has said Labor's plan to scrap negative gearing and capital gains tax could raise $37 billion to help balance the budget, with assistant treasurer Michael Sukkar calling the plan "a cash cow designed to raise money for [Shorten's] other 'policies'.