Australian Groups Urge Parliament to Pass Negative Gearing and CGT Changes

Australia's peak community and housing groups have urged federal parliament to quickly pass Labor's changes to negative gearing and capital gains tax. The reforms would improve fairness for renters and young homebuyers, according to the groups. The government may introduce the negative gearing and CGT changes into parliament as soon as the coming sitting fortnight.

Officials hope to pass the legislation soon after with the support of the Greens.

The changes include limiting new negative gearing to new-builds and grandfathering existing properties. Officials also plan to change how CGT is calculated. Both reforms were presented as ways to rebalance the housing market toward first home buyers instead of property investors.

A joint statement from the Australian Council of Social Service, Everybody's Home, Better Renting and National Shelter said the changes would improve fairness and level the playing field. The groups predicted the changes would improve housing stability for renters by encouraging long-term investment in housing.

Treasury modelling in the budget forecasts 35,000 fewer homes will be built over the next 10 years as investors put their money elsewhere. The impact on rents is estimated to be an extra $2 weekly for the median renter. Treasury modelling estimates the changes would see an additional 75,000 first home buyers, and changes to regulations would support another 30,000 new homes being built, over the next decade.

Responses Some economists have raised concerns that home values are set for their first national slump since 2022. The property lobby has also expressed concerns. The shadow treasurer pointed to modelling from SQM Research claiming Sydney rents could increase by $160 weekly, and Melbourne $130 weekly.

Labor sources said that modelling does not reflect the government's policy, which allows homes currently negatively geared to keep using that tax treatment.