Overview
- Finance Minister Katy Gallagher signalled the government is considering tweaks to the 50% capital gains tax discount as part of its housing affordability work ahead of the May budget.
- A Greens‑chaired Senate committee has urged the discount be curtailed, with Treasury officials telling the inquiry any effect on new housing construction from changes would likely be mild.
- Design options under discussion include cutting the discount to about 25%, possible grandfathering or phased transitions, and retaining more generous settings for newly built investment properties.
- Former Treasury secretary Ken Henry labelled the current discount the “dumbest” approach and urged a flat 25% tax on all investment income, while Saul Eslake warned against grandfathering but said he would accept it to secure reform.
- Coalition figures have attacked potential changes, with Nationals senator Matt Canavan calling them an “inflation tax,” as the government maintains caution on specifics and has ruled out touching the family home exemption.