What changes is the Australian government proposing for capital gains tax and negative gearing?

The Albanese government plans to abolish the current 50 per cent capital gains tax (CGT) discount, replacing it with a pre-1999 inflation-indexed model underpinned by a 30 per cent floor. Additionally, the reforms will strictly limit future negative gearing tax concessions to newly built properties only, rather than established ones.

Why is the government fast-tracking these property and investment tax changes?

The government is rushing the legislation through parliament to contain growing political backlash and prevent the debate from dragging out over the winter recess. By introducing the laws in early June and aiming for passage within three weeks, the government is deliberately shortening the timeframe available for a detailed Senate inquiry.

How will the changes to negative gearing affect property investors and traders?

Under the proposed rules, property investors will no longer be able to claim negative gearing tax deductions on established properties bought after the changes take effect. Future negative gearing concessions will be exclusively restricted to new builds, a move intended by the government to direct investment toward housing supply rather than existing stock.

What is the expected impact of the CGT changes on asset tax rates?

According to Treasury data released by the government, the average tax rate on capital gains is projected to increase from 19.3 per cent to 21.4 per cent over the next decade. However, critics and business groups maintain that the economic fallout will be more severe and widespread than this average increase suggests.

Why are small business groups and independent MPs opposing the fast-tracked legislation?

The Council of Small Business Organisations Australia (COSBOA) warns the reforms threaten small-business viability, retirement security, and family succession planning. Independent MPs, including Allegra Spender, argue that the rigid inflation-indexing model disproportionately penalises knowledge-based, low-capital investments, and have urged broader exemptions beyond just tech start-ups.

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Albanese to rush housing tax overhaul through parliament

Written by Liezl GambePublished May. 19 2026Last Updated May. 19 2026

The Albanese government is planning to ram controversial changes to capital gains tax and negative gearing through parliament before the July winter break, shortening the timeframe for scrutiny to contain a growing political backlash.

The draft laws, scheduled for introduction in early June, will abolish the 50% CGT discount in favour of a pre-1999 inflation-indexed model with a 30% floor.

Additionally, future negative gearing will be strictly limited to newly built properties. Prime Minister Anthony Albanese defended the fast-tracked timeline, asserting the reforms are vital to correcting "massive distortions" in the housing market.

With the Greens poised to support the legislation in the Senate, the government has signalled it wants the bill passed within three weeks of introduction, leaving minimal time for a parliamentary enquiry.

The rush has sparked fierce resistance from the Coalition, small business groups, and teal independents, who argue the policy will collateralise family businesses and damage economic viability.

Independent MP Allegra Spender urged the government to halt the rush, warning that the rigid indexing model disproportionately harms knowledge-based, low-capital investments.

Meanwhile, the Council of Small Business Organisations Australia warned the reforms pose severe threats to succession planning and retirement security.

Despite Treasury data indicating the average CGT rate would only rise from 19.3% to 21.4% over the decade, critics maintain the economic fallout will be widespread.

However, with Labor commanding the House of Representatives and relying solely on the Greens to secure the Senate balance of power, the government remains well-positioned to bypass broader parliamentary dissent.