Treasurer Jim Chalmers has indicated that any upcoming reforms to negative gearing and capital gains tax (CGT) will likely include safeguards for existing asset holders.
While senior ministers finalize the May 12 budget, Chalmers suggested that new policies would respect "decisions that people have taken in the past," signaling potential grandfathering for current investments.
Contrary to estimates that abolishing negative gearing could generate $5 billion annually, the Treasurer dismissed expectations of an immediate revenue surge.
He emphasized that the primary goal of these housing reforms is to assist younger Australians in entering a market currently hindered by low supply and high costs.
Beyond tax adjustments, the budget will prioritize national productivity through AI and reduced business compliance costs.
This comes as Australia faces a three-year inflation high of 4.6%, driven largely by rising fuel prices stemming from the conflict in Iran.
Additionally, while housing construction projections have improved to 980,000 homes by 2029, the nation remains over 200,000 units short of its original target due to ongoing sector pressures.