Housing Minister Clare O’Neil says tax changes will have 'modest' impact on house prices
The housing minister has admitted property prices would come down slightly due to negative gearing and capital gains tax measures in the budget.
Changes to negative gearing and the capital gains tax will have a small impact on property affordability, the housing minister concedes.
The Federal Government will on Thursday introduce to parliament its changes to the taxes, to make it easier for more first home buyers to enter the market.
Under the changes, negative gearing would only be limited to new homes from July 2027, while the 50 per cent discount on capital gains tax would be replaced by a rate based on inflation from the same time period.
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By continuing you agree to our Terms and Privacy Policy.Housing Minister Clare O’Neil said while the changes would enable 75,000 more people to buy their first home over the next decade, property prices would come down as a result.
“This will have a modest affordability effect on house prices in Australia, but at the end of the day, the thing that is driving house prices is actually not our tax settings,” she told ABC TV on Wednesday.
“It’s a fundamental mismatched between how many homes we’re building and how many homes we need.
“These changes are difficult, but incredibly important for addressing the housing challenges the country faces.”
The government will bundle the tax changes in the same laws as a $250-a-year tax offset.
The coalition is set to oppose the measures, conceding it will open them up to attacks for voting down tax cuts for working Australians.
Opposition frontbencher Melissa McIntosh said the government was trying to rush the laws through parliament.
“They’re trying to push a whole bunch of legislation through budget-related, including their taxes on small businesses,” she told ABC Radio.
“The government promised transparency when they came into power and pushing legislation through, whether it’s the NDIS or whether it is their taxes related to the budget, there’s no transparency in that.”
It comes as a Guardian Essential poll showed 56 per cent of those surveyed said Labor had fallen short of expectations since the 2025 election.
The poll also found 39 per cent disapproved of the budget, compared to 25 per cent backing the financial document.
The negative gearing and capital gains tax changes were backed by 33 per cent, compared to 27 per cent against it.
The government is consulting industry groups about potential carve-outs from the new capital gains tax regime for startups, which could face their top marginal tax rate doubling to near 47 per cent when they sell their business.
Shadow treasurer Tim Wilson said the carve outs showed the changes were misguided.
“This budget is unravelling faster than I think anybody could imagine, and so they’re trying to come up with every different scenario to try and deflect the problems,” he told Sky News.
