BackECONOMY
Australia has some of the world's costliest homes. Will scrapping tax breaks help?
The article discusses Australia’s housing affordability crisis, arguing that tax breaks like negative gearing and the CGT discount fuel housing investment. It outlines proposed reforms to replace the CGT discount with an inflation-based markdown and to limit negative gearing to new builds, with grandfathering for established homes, and notes potential impacts on prices and supply.
Why It Matters
Intergenerational inequality is highlighted as a result of housing unaffordability, with policy changes aiming to rebalance access to home ownership and influence rental markets and construction.
Timeline
4 Events
Budget reforms: CGT discount replaced, negative gearing limited, grandfathering
May 12, 2026
In its budget, the government promised to replace the CGT discount with an inflation-aligned markdown and to limit negative gearing to new builds only. The reforms would be grandfathered, applying only to established homes bought after the budget, with current beneficiaries retaining their advantages. Experts suggest the changes may modestly lower prices but will not, on their own, solve housing supply or affordability issues.
Backlash over Albanese's 2024 cliff-top home purchase
2024
The article notes backlash surrounding Prime Minister Anthony Albanese's purchase of a multi-million-dollar cliff-top home in 2024 as a signal about public mood on housing policy.
Labor proposes changes to negative gearing and CGT again after 2019 election
May 18, 2019
Labor proposed changes to negative gearing and the CGT discount at the 2019 federal election. The party again did not win the election, and the proposals were not enacted.
Labor proposes changes to negative gearing and CGT after 2016 election
July 2, 2016
Labor proposed changes to negative gearing and the capital gains tax (CGT) discount at the 2016 federal election in Australia. The party lost the election, and the proposals did not become law.