<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Speculation is building one of </span><a href="https://www.9news.com.au/australia" rel="" target="" title="Australia's"><span>Australia's</span></a><span> most controversial </span><a href="https://www.9news.com.au/tax" rel="" target="" title="tax"><span>tax</span></a><span> breaks will be overhauled as the centrepiece of </span><a href="https://www.9news.com.au/federal-budget" rel="" target="" title="this year's federal budget"><span>this year's federal budget</span></a><span>, with senior government ministers refusing to categorically rule out changes despite days of reports.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Under </span><a href="https://www.9news.com.au/anthony-albanese" rel="" target="" title="Prime Minister Anthony Albanese"><span>Prime Minister Anthony Albanese</span></a><span>, Labor has previously baulked at tinkering with the capital gains (CGT) discount following the party's particularly ill-fated attempt at the 2019 election.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But with young Australians becoming increasingly priced out of the </span><a href="https://www.9news.com.au/property" rel="" target="" title="property market"><span>property market</span></a><span>, the budget desperately needing a way out of its structural deficit, and </span><a href="https://www.9news.com.au/jim-chalmers" rel="" target="" title="Treasurer Jim Chalmers"><span>Treasurer Jim Chalmers</span></a><span> speaking of the need to address the country's widening intergenerational divide, some signs are pointing towards a possible overhaul in the coming months.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/tax-relief-for-beer-lovers-but-spirits-drinkers-call-for-reform-of-broken-system/b582f1b3-3bca-4d84-924b-09aaf5f63023"><strong><span>Why a beer tax break has some claiming the 'system is broken'</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Why is the capital gains tax discount up for discussion?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Readers would be forgiven for thinking all of this is old news – the capital gains tax discount seems to become a major political flashpoint every couple of years.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It was only in late 2024 that reports emerged of the </span><a href="https://www.9news.com.au/finance/what-is-negative-gearing-capital-gains-tax-investment-property-tax-concessions-australia-explained/79a83105-f4c6-4121-a693-6df0692adba8" rel="" target="" title=""><span>government directing Treasury to investigate a potential overhaul of the tax break</span></a><span>.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/capital-gains-tax-discount-australia-speculation-overhaul-federal-budget-2026/1fcd9f5b-370a-4045-a4c3-c00c4dbec466" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This time, there are a couple of fresh factors at play. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The first is a Greens-led Senate inquiry into the tax, which has received dozens of submissions and is due to report next month.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The second – and more significant – are reports, </span><a href="https://www.afr.com/politics/federal/changes-to-cgt-discount-under-consideration-as-reform-budget-looms-20260203-p5nz1a"><span>published first by the Australian Financial Review</span></a><span>, that the government is considering changes to the CGT discount.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>FROM 2024:</span></strong><span> </span><a href="https://www.9news.com.au/finance/what-is-negative-gearing-capital-gains-tax-investment-property-tax-concessions-australia-explained/79a83105-f4c6-4121-a693-6df0692adba8" rel="" target="" title="What is negative gearing and why are calls to change it so controversial?"><strong><span>What is negative gearing and why are calls to change it so controversial?</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>That, in turn, followed ALP national secretary Paul Erickson, the mastermind of Labor's last two election victories, hinting this year's budget on May 12 will include some significant, ambitious reform.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"You will see some pretty substantial contributions over the coming months from the PM and from the treasurer, and the lead-up to the budget that will set that out," he </span><a href="https://www.afr.com/politics/federal/he-helped-albanese-win-two-elections-here-s-his-next-political-move-20251215-p5nnt1" rel="" target="" title=""><span>told the AFR over the weekend</span></a><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Senior Labor figures have since had the opportunity to categorically rule out the changes, but declined.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/e-bikes-calls-for-more-limits-how-old-riders-have-to-be-state-by-state/3001b4a8-466b-4151-a07f-b01e7d67d5bc"><strong><span>The lone Aussie state that puts age limits on e-bike riders</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Take a look at what Deputy Prime Minister Richard Marles said in October 2024, when he was asked to rule out changing the discount:</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"I just did. And not only have I done that, the prime minister has made that clear."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Compare that to yesterday morning, when Marles was asked about capital gains once again but wasn't quite as demonstrative:</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Our position in respect of housing policy is clear. And that hasn't changed. And nor has our position in respect of the tax arrangements around housing. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And we've got to have more houses in this country and that is a real challenge."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/xi-jinping-and-vladimir-putin-closer-ties/824484ee-4654-4ba0-818d-4833b0614729"><strong><span>The phone call that will have the world on notice</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Why is the capital gains tax discount so controversial?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Alongside negative gearing, the CGT discount provides property investors with generous tax incentives at the same time as housing has become unaffordable for many, particularly young, Australians.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Introduced in 1999 by the Howard government, the policy allows investors to sell an asset they've owned for at least a year and to only be taxed on half of the profit.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>While it applies to all types of assets, it has coincided with a significant increase in property prices:</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/rba-february-2026-interest-rates-decision-what-this-means-mortgage-explained/2e9fa2e7-e7a6-4909-a7aa-4fdb9c626e5c"><strong><span>How much more you could be paying on your mortgage after cash rate hike</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Unsurprisingly, the policy is popular with many Australians who have benefited from it over the past three decades, and a proposal to wind back the provisions has been widely cited as a reason why Labor lost the 2019 federal election.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But, at the same time as the concession is costing the nation's coffers around $23 billion a year – a number that will only rise – the government desperately needs to find new revenue for the federal budget, which is forecast to be stuck in the red for the foreseeable future.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Parliamentary Budget Office modelling commissioned in early 2024 by independent senators Jacqui Lambie examined five options for winding back both negative gearing and the CGT tax discount for property, all of which included so-called "grandfathering" provisions – that is, exemptions for existing property investors from the changes.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The analysis found reducing the concessions could save the federal budget between $15.6 and $59.9 billion over the next 10 years, while also making housing more affordable.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Leading economists including former Treasury secretary Ken Henry, Saul Eslake and Richard Holden have also thrown their support behind various changes to the CGT tax discount.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/nsw-tells-federal-government-to-remove-capital-gains-tax/786d08ca-d34e-4178-a9e9-ee9e392a7000"><strong><span>NSW urges federal government to scrap $23 billion tax discount</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Would any changes get through parliament?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>One factor in the government's favour is that, if it does decide to go ahead with winding back the tax discount for investment properties, the overhaul would likely sail through parliament.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Labor easily has the numbers to get any bill through the lower house, and only needs the support of the Greens – who have long supported scrapping tax concessions for property investors – to get laws past the Senate, where the likes of Pocock and Lambie are also likely to lend their support.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"There's a real opportunity here for sensible reform to the capital gains tax discount on investment properties to incentivise the new housing supply our country so desperately need," Pocock said earlier this week.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"It won't solve housing affordability on its own but it will help."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><span> </span><strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 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