The Albanese government has introduced significant reforms to property tax concessions in an effort to lower investor demand and increase home ownership for thousands of Australians.
According to federal budget outlines, investment properties purchased after 7:30pm on budget night will no longer benefit from negative gearing starting July 1, 2027. At that same time, the 50% capital gains tax (CGT) discount will also be replaced.
The government expects these changes to help an additional 75,000 Australians achieve home ownership over the coming decade, with further benefits for first home buyers following that period.
The ‘Forever Renter’ Struggle
Despite these measures, some residents argue the changes do little for “forever renters” who find the cost of a home deposit insurmountable.
Alyssa Shaw, 36, has moved 25 times in 15 years, averaging a move every nine months. Shaw, who has worked since age 14, notes that her rent increased by approximately 44% over five years, while her income did not keep pace.
Similarly, 26-year-old Koushalya Pereiaslov, a support worker for NDIS participants, spends up to half of her pay on rent. Having moved on average once a year, Pereiaslov describes the dream of home ownership as unattainable for those in her economic demographic.
Economic Projections and Expert Analysis
Treasury modelling suggests the impact on rents will be minimal, estimated at an extra $2 per week for households paying the median rent.
The reforms are also estimated to slow the growth of property prices by 2% over the next few years. Properties bought before May 12, 2026, are grandfathered in, though Treasury expects these existing benefits to wash out after about 10 years.
Prof Wendy Stone, a housing expert at Swinburne, describes the budget as taking “some bold first steps” toward addressing structural housing inequality. However, she notes that for long-term renters, the budget “doesn’t necessarily change that picture.”
Political Divide and Future Outlook
The reforms have drawn sharp criticism from across the political spectrum. The Greens argue that the changes entrench inequality by locking in tax breaks for owners of multiple properties.
Meanwhile, the Coalition has vowed to repeal the changes to negative gearing and capital gains tax should they return to government.
Future housing stability may depend on whether the government considers further measures. Some renters, including Shaw, suggest that prioritising rental caps could be a necessary step to protect working-class people.
Depending on the political climate, these reforms could either be solidified as a new standard for the housing market or be reversed in a subsequent administration.
Frequently Asked Questions
When do the new tax reforms take effect?
Negative gearing benefits and the 50% capital gains tax discount will be replaced starting July 1, 2027.
Which properties are exempt from these changes?
Properties bought before May 12, 2026, are grandfathered in and will not be subject to the new rules.
How will these changes affect rent prices?
Treasury modelling estimates the effect on rents will be minimal, with an estimated increase of $2 a week for a household paying the median rent.
Do you believe tax reforms alone are enough to solve the housing crisis for long-term renters?
