The Budget 2026: Labor confirms property tax promises broken, investors to be hit

Anthony Albanese and Jim Chalmers have confirmed they are changing tax breaks for property investors in the Budget that will be released later tonight, breaking promises made a year ago to leave them untouched.

The Prime Minister and Treasurer, along with Finance Minister Katy Gallagher, have released a video on social media announcing the changes.

However, the finer details will only be revealed when Dr Chalmers delivers his Budget speech at 7.30pm.

“Buying your first home shouldn’t feel impossible. But right now, too many young people feel locked out of the housing market. Tonight, we’re changing Australia’s tax system to level the playing field for them,” the trio say in the video.

The move on capital gains tax discounts and negative gearing has been widely foreshadowed, but ministers refused to confirm until now that it was happening.

However, they said that if they did change the government’s position, they would explain why it was needed.

Mr Albanese repeatedly ruled out changes during last year’s election campaign.

Since the 50 per cent discount on capital gains tax was introduced in 1999, house prices have increased almost twice as fast as average full-time wages.

It now takes four years longer to save for a deposit than it did two decades ago, and between 1981 and 2020, the average age of first-time buyers increased from 27 years to 35 years.

Home ownership rates have dropped across all age groups since 1981, but they’ve fallen fastest among people aged under 30.

In 2020, only about half of people aged 30-34 and a third of those aged 25-29 owned their home, according to government figures.

Earlier on Tuesday morning, Dr Chalmers said the Budget would seek to deal with “major challenges” that had been lingering in the economy.

“These are not the first reforms that we have undertaken, it’s been a reforming government, but I think the pace of change will pick up tonight, and that’s because we are taking on a number of very important policy issues,” he said.

“That always involves and invites an element of political risk. It will unleash the usual scare campaigns full of lies – people who want to defend the current arrangements.”

He said those who defended current tax settings and the housing market were avoiding dealing with the substantive issue of people locked out of the market.

The government is also highly conscious that this Budget lands against a backdrop of a populist, anti-establishment wave sweeping Australian politics, which manifested in One Nation’s huge win in the Farrer by-election at the weekend.

Dr Chalmers said he understood there were many people with “very real concerns” about the state of the housing market or who felt they were unable to get a toehold in the economy more broadly.

“(The Budget) is not a political document or a political strategy, it’s an economic plan ... to deal with some of these economic issues, but at the same time, it will respond to a lot of the pressures and anxieties that people are feeling, which is driving them to consider some of the parties outside the mainstream,” he said.