Overview
- The Albanese government, which several sources confirmed Monday will target negative gearing, the capital gains tax discount and discretionary trusts in the May 12 budget, is pitching the plan to younger voters.
- Design work is still underway, with negative gearing expected to be fully grandfathered, a partial grandfathering likely for capital gains, and the scope of trust tax changes yet to be settled.
- Prime Minister Anthony Albanese previously ruled out changes to negative gearing, and opponents now accuse Labor of breaking a promise as figures such as Barnaby Joyce label the plan a cash grab.
- Treasurer Jim Chalmers says the budget will be restrained and responsible, leaning on previously flagged savings from tighter NDIS growth of more than $35 billion and about $3 billion from changes to the private health rebate.
- Negative gearing lets investors deduct rental losses from wage income and the CGT discount halves tax on gains after 12 months, which economists say can draw money into property and may lift rents slightly if wound back while nudging prices down and ownership up depending on how transitions are set.