What are the proposed changes to negative gearing and Capital Gains Tax (CGT)?

The Albanese Government has signaled that the upcoming Federal Budget may include reforms to negative gearing and the Capital Gains Tax (CGT) concession.

Why is the Federal Coalition opposing these property tax reforms?

The Coalition argues that cutting tax concessions for property investors will act as a "disincentive" to build new homes, potentially worsening the housing shortage.

How could changes to negative gearing affect retail property investors?

If negative gearing is capped or removed, investors would lose the ability to offset rental property losses against their taxable income, effectively reducing their net cash flow.

What does a Capital Gains Tax (CGT) hike mean for long-term investors?

Current Australian law allows individuals a 50% discount on capital gains for assets held longer than 12 months; reducing this discount would increase the tax bill when an investor sells a property.

Will these tax changes actually increase housing supply?

This is a point of heavy debate between the major parties. The Government suggests reform could level the playing field for first-home buyers, while the Coalition argues that private investment is the engine of new construction.

Coalition slams Labor's housing tax "thought bubbles"

Written by Liezl GambePublished May. 11 2026Last Updated May. 11 2026

The Federal Coalition has launched a preemptive strike against the Albanese Government's anticipated budget centrepieces, slamming potential reforms to negative gearing and capital gains tax as a threat to national housing supply.

Following a series of media appearances by Treasurer Jim Chalmers and Finance Minister Katy Gallagher—who both identified housing as a primary budget pillar—the Opposition has warned that any "tax grab" on property investors will only deepen the existing crisis.

Coalition finance spokeswoman Claire Chandler argued this morning that increasing the tax burden on investors is a fundamentally flawed approach to the shortage.

Speaking with ABC Radio National, Senator Chandler criticised the Treasurer for floating "thought bubbles" that risk destabilising the market.

"My starting point for all of these housing-related tax issues is that you don’t make more of something by increasing taxes on it," she stated.

The opposition contends that these concessions act as vital incentives for private investment in the rental market and that scaling them back would stifle new construction.

As the government prepares to hand down the budget tonight, the Coalition has committed to scrutinising the fine print of any proposed CGT adjustments.

Senator Chandler emphasised that the only viable solution to the housing crisis is to boost construction, rather than introducing what she termed "inherent disincentives" for developers and landlords.

With the budget set to be tabled this evening, the political battleground has firmly shifted towards whether tax reform or supply-side incentives will best house the nation.