First published in Region Canberra, 25 March 2026 | By Corinne Dobson
Following the release of the Federal Parliament Committee report into the capital gains tax discount, the Albanese government faces a clear choice: continue defending tax settings that are worsening Australia’s housing crisis, or act on the evidence and begin long-overdue reform.
Themajority report from the Senate Select Committee – supported by Labor Senators – finds the capital gains tax discount is skewing home ownership toward investors, disproportionately benefiting higher-income Australians, and distorting investment across the economy.
The question now is what happens next.
With the Federal Budget approaching, momentum for reform is building. But so too is the risk of Labor settling for minor tweaks – of reforms diluted to appease the loud and powerful interests that benefit most from the current system.
But tinkering at the edges will not fix a housing crisis decades in the making.
For more than 20 years, Australia’s housing market has been shaped by the interaction between negative gearing and the 50 per cent capital gains tax discount. Introduced in 1999, the discount allows investors to pay tax on only half of the profit made when selling assets held for more than a year, including investment properties.
Combined with negative gearing, which allows investors to deduct rental losses against other income, the system rewards leveraged property investment…
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