Intergenerational equity 2026 – Australia’s long-running housing affordability crisis is once again in the spotlight — and this time, it’s tied to a massive tax question that could reshape the property market.
Prime Minister Anthony Albanese has stopped short of confirming changes to the 50% capital gains tax (CGT) discount, but he hasn’t ruled them out either. With the federal budget approaching, speculation is building that Labor may review tax settings linked to investment properties in the name of “intergenerational equity.”
What Is the 50% CGT Discount — and Why Does It Matter?
The CGT concession, introduced by the John Howard government in 1999, allows investors to pay tax on only half the capital gain made from selling an investment property — provided they’ve held it for more than 12 months.
Critics argue the policy has fuelled property speculation and driven up house prices. Supporters say it encourages long-term investment and stability in the housing market.
The debate has intensified as younger Australians struggle to enter the property market, while investors continue to benefit from generous tax settings.
PM Focuses on Housing Supply, Avoids Direct Answer
In a recent interview with the Australian Broadcasting Corporation, Albanese was pressed on whether Labor would wind back the CGT discount or negative gearing benefits.
Negative gearing allows property investors to deduct rental losses from their taxable income if rental returns fall short of loan repayments.
Rather than directly answering the question, the Prime Minister shifted the focus to housing supply and income tax cuts. He emphasized that no announcements would be made outside the formal budget process.
“We’re focused on income tax cuts and increasing housing supply,” he said, declining to confirm or deny potential CGT changes.
The Bigger Issue: Intergenerational Equity 2026
Albanese framed the broader debate around fairness between generations.
He pointed to policies already introduced by his government — including a 20% reduction in student debt, free TAFE courses, expanded university hubs, and paid practical placements for teachers and nurses — as measures designed to ease pressure on younger Australians.
“Younger generations are doing it tough,” he said, suggesting that tax and housing policies must reflect that reality.
Budget Pressure Builds
Federal Treasurer Jim Chalmers is also facing mounting pressure to balance the books ahead of the May budget. Rising government spending has been linked by critics to persistent inflation and recent interest rate hikes.
A parliamentary budget office review, commissioned as part of a Greens-led inquiry, estimated that the CGT discount could cost the federal budget $247 billion over the next decade.
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However, Treasury officials have previously indicated that reducing the CGT discount and negative gearing benefits may only lower house prices by between 0.5% and 4.5% — suggesting supply-side reforms may have a bigger impact on affordability.
What Happens Next?
With the federal budget approaching, investors, homeowners, and first-home buyers are all watching closely.
While no formal policy shift has been announced, Albanese’s emphasis on intergenerational equity signals that tax reform remains firmly on the table.
If changes to capital gains tax settings do emerge, they could mark one of the most significant shifts in Australia’s housing and tax landscape in decades.