Prime Minister Anthony Albanese is standing firm on his controversial changes to capital gains tax and negative gearing, insisting the reforms are the right course of action despite widespread criticism from housing industry experts and economists.
Speaking at the Victorian Labor Party state conference on Saturday, Mr Albanese defended the changes, which have been condemned by many, and reiterated his claim that they would help thousands of young Australians achieve the Great Australian Dream of home ownership.
“It has never been harder for young people to buy a home of their own,” Mr Albanese said.
“Even though so many of them are doing everything right: working hard, saving hard for a deposit, going to dozens of inspections and auctions.
“For so many, it feels like they are paddling furiously, but going nowhere.
“And they are right to feel that. Because the truth is, the system isn’t working.”
Mr Albanese, who promised at the last election not to alter existing negative gearing and capital gains tax rules, has since reversed his position and announced changes in last week’s Federal Budget.
Starting July 2027, negative gearing will be limited for residential property investments to new builds only.
The 50 per cent capital gains discount for individuals, trusts and partnerships will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains.
Mr Albanese said he believed his reforms would “bring the great Australian dream of home ownership back in reach for a new generation”.
“Since 1999, house prices have risen by more than 400 per cent — more than twice as fast as incomes,” Mr Albanese said.
“And every Saturday . . . young people are out there.
“They go to an auction and they’re there bidding away for the home that they want to live in, the security that comes from that roof over your head.
“But the person next to them has got someone else on their side — the Australian taxpayer. And because of the tax breaks that are there, it’s not an equal process.
“Because if it’s a matter of an extra $20,000 to bid or $30,000 to bid, they know that they can do that in the comfort that that will be an increase in their tax deduction, that all of you and every Australian taxpayer is their partner here.
“But if you’re trying to buy your own home, you don’t have that.
“That’s why, put simply, we are reforming negative gearing and capital gains.”
