A360
Key Takeaways✦ Atlas AI
01
Coalition opposes Labor's tax reforms.
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Reforms target negative gearing, capital gains.
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Repeal would create A$70 billion budget gap.
Atlas AI
Australia’s opposition Coalition said Wednesday, May 15, it would repeal the Labor government’s proposed changes to negative gearing and the capital gains tax discount if it wins the next federal election, setting up a political fight over housing and tax policy.
Shadow Treasurer Tim Wilson and Opposition Leader Angus Taylor said a future Coalition government would reinstate more generous rules for property investors and for Australians using trusts to minimise tax. They also said the Coalition would seek to block the measures in parliament in the coming weeks.
The pledge directly challenges reforms announced in Labor’s latest budget, which would end negative gearing for some new investment properties and scale back the 50% capital gains tax discount. The government’s changes would apply to investment properties purchased after Tuesday night, and the replacement of the current discount is scheduled for July 1, 2027.
The Coalition has argued the proposed changes would be harmful, while Labor has framed them as tax reform. The two sides are positioning the issue as a key economic dividing line ahead of the next election.
What the budget changes would do
Under Labor’s plan, investment properties bought after Tuesday night would no longer qualify for negative gearing. The budget also proposes scaling back the capital gains tax discount, with the existing 50% discount to be replaced from July 1, 2027.
The reforms would take effect in stages and are timed so that the full suite of changes would coincide with the next federal election, which is constitutionally due by mid-2028.
Fiscal and parliamentary stakes
Scrapping the measures would leave the budget about A$70 billion worse off, according to the estimate cited in the report, meaning a future government would need to find offsetting savings or new revenue to cover the shortfall.
In parliament, the Greens said it would negotiate with Labor and wants more detail on the proposed changes before committing its support. The Coalition said it would fight the proposals in the coming weeks while backing the new A$250 tax offset for workers and new hospital funding announced in the budget.
Lawmakers will now debate the reforms as Labor seeks to pass its budget agenda and the opposition lays out its alternative approach ahead of the next election.
