The Australian federal government is introducing legislative changes to negative gearing and capital gains tax policies, intended to improve housing affordability for first-home buyers. The proposed reforms will limit negative gearing to new housing from July 2027 and replace the current 50% capital gains tax discount with an inflation-based rate, also effective from the same date.
Housing Minister Clare O'Neil stated that these tax adjustments are expected to have a "modest" impact on overall property prices. She attributed the primary driver of high house prices to a fundamental imbalance between the construction of new homes and the growing demand for housing. The government estimates that these changes could help around 75,000 more people buy their first home within the next ten years.
The government plans to include these tax measures alongside a $250 annual tax offset in the same legislative package. The opposition has indicated its intention to oppose these measures, potentially leading to political debate regarding tax cuts for working Australians. The proposed changes aim to address long-standing issues within the housing market.
