Greens Layout Minority Government Terms: Sweeping Change to Capital Gains and Negative Gearing

The party demands reforming negative gearing and capital gains tax discounts to help first home buyers and renters, while shielding ’mum and dad' investors.

A general view of housing in the suburb of North Sydney facing towards the central business district (CBD) in Sydney, Australia, on June 28, 2024. Lisa Maree Williams/Getty Images

The Greens are demanding sweeping reforms to negative gearing and the capital gains tax (CGT) discount as a top priority in minority government talks.

They argue the tax changes will bring relief to renters, open doors for first home buyers, and soften the blow of global tariff upheaval.

Negative gearing allows investors to claim losses from rental properties as tax deductions, often relying on property value appreciation to offset short-term losses.  The CGT discount halves tax on profits from asset sales held longer than a year.

Greens Leader Adam Bandt said an independent analysis shows the proposed reforms would help over 850,000 people move into home ownership, many of them among the 31 percent of households who currently rent.

The party also cited data showing renters would have paid an average of $6,318 less had a national rent freeze been adopted in August 2022, the month they first called for it. That equates to $13 billion in savings for renters nationally.

It further claims that a poll conducted last year found that half of voters support capping negative gearing, while 70 percent back broader price controls, including rent caps.

Key Policy Changes

The Greens will keep negative gearing and the 50 percent CGT discount for one existing investment property to protect “mum and dad” investors.

However, properties purchased after the policy’s commencement, as well as any second or subsequent investment properties already owned, would not be eligible for these concessions.

In addition, the 50 percent CGT discount would be scrapped for all other assets, with non-housing assets to be indexed by inflation. These changes would apply only to investment properties.

“Australia has a choice to make: either we give our children and grandchildren the same chance at home ownership that previous generations had, or we continue to give investors with multiple properties billions of dollars in tax handouts. It can’t be both,” said Max Chandler-Mather MP, Greens housing spokesperson.

However, Ben Philip, associate professor at the Centre for Social Research at the Australian National University, said removing negative gearing may not meaningfully impact housing affordability.

“Negative gearing is a legitimate tax deduction, similar to any other investment where a loss is incurred,” he told The Epoch Times.

He added, “Some investors place more value on negative gearing than it’s really worth, so the impact may be larger than economists think.”

A report from Housing Investment Australia noted that other countries including Germany, Japan, Canada, and Norway also allow forms of negative gearing, albeit with various restrictions.

Major Parties Reject Changes

Negative gearing dominated discussions towards the end of 2024 when Treasury reviewed the policy.

Prime Minister Anthony Albanese later confirmed that Labor would not make changes and instead focus housing policy towards other areas.

“What we’re doing is planning for our Homes for Australia policy. That’s the policy we have, and that’s what my government is focused on,” he told ABC News in Sept. 2024.

He said increasing housing supply remains Labor’s key focus.

Opposition Leader Peter Dutton also ruled out any changes to negative gearing.

“We are strongly opposed to any changes to negative gearing as it would disrupt the housing market,” he said.

“It will lead to higher rents and is not in the best interest of the nation.”

This marks the Greens’ fourth minority government priority, following proposals to include dental in Medicare, end native forest logging, and expand free early childhood education and care.