The Australian Coalition has vowed to repeal Labor's proposed capital gains tax overhaul and changes to negative gearing, signaling strong opposition to reforms that have triggered investor backlash, particularly within the startup and property sectors.
- Coalition will repeal Labor’s CGT and negative gearing reforms.
- Labor defends reforms as necessary to aid young Australians' housing access.
- Government to consult on startup-focused carve-outs before reforms start in 2027.
What happened
The Australian Coalition announced it will rescind the tax reforms introduced by the Labor government regarding capital gains tax and negative gearing on investment properties if it returns to power. Shadow Treasurer Tim Wilson stated the Coalition opposes the changes and plans to implement its own tax package aimed at fostering economic growth.
These reforms include replacing the 50% CGT discount with a cost-base indexation system applied to assets held longer than 12 months and introducing a 30% minimum tax on net capital gains. Additionally, the government plans to continue current negative gearing arrangements, which allow investors to deduct losses on investment properties from their taxable income.
Why it matters
The CGT and negative gearing reforms have sparked significant pushback from investors and the startup community, concerned the changes could reduce incentives for equity investment and early-stage funding. These sectors argue the reforms may diminish Australia’s attractiveness as a destination for startup capital and hamper economic innovation.
On the other side, the Labor government argues these measures are critical to addressing Australia’s housing affordability crisis, which disproportionately affects younger Australians trying to enter the property market. Prime Minister Anthony Albanese has emphasized that changing tax incentives aims to make the system fairer and reduce the advantage enjoyed by wealthier property investors.
What to watch next
Stakeholders should monitor the political landscape ahead of upcoming elections, as a change of government could reverse or alter these tax policy directions significantly. The Coalition’s promise to repeal Labor’s tax reforms could bring relief to property owners and startup investors, but uncertainty remains about the alternatives the Coalition will propose.
Meanwhile, the Labor government has indicated it will consult specifically on provisions for startups and venture capital within the CGT framework. This consultation, scheduled before the reforms’ scheduled rollout in July 2027, could yield carve-outs that balance housing affordability goals with the need to nurture Australia’s innovation ecosystem.