of Australia Capital gains tax The discount will cost about $250bn over the next decade, more than twice the price of the discount over its entire 25-year history.
As the federal government considers scaling back the 50% rebate to help first home buyers, new figures from the Parliamentary Budget Office show the rebate budget has lost $205 billion in revenue since it was introduced in 1999.
But rising property prices in Australia and demand from other investors could push the total price tag to $247 billion over the next 10 years.
Commissioned by the Greens as part of a pressure campaign on Labor to roll back Howard-era cuts, figures show the top 1% of taxpayers will benefit by almost 60% this financial year.
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The biggest beneficiaries are retirees with no taxable income and people earning more than $362,900, according to the PBO analysis.
A 50% capital gains tax rebate applies to any investment held for more than 12 months. Introduced by the Howard government in 1999, it has been criticized for promoting housing as an investment mechanism for wealthy Australians over the rights of owner-occupiers, along with negative gearing rules.
Federal Labor went to the 2016 and 2019 elections promising to return the discount, but was defeated by the Coalition both times.
The Federal Treasury has drawn up changes to the negative gearing rules in 2024, curbing CGT deductions for investors, which will have a further impact on lowering house prices. Neither policy will help increase housing supply.
Senior Labor figures opened up the possibility of changes to CGT in May’s federal budget, which the Greens support as part of efforts to boost home ownership.
But on Thursday, Cabinet ministers insisted there was still no change in Labour’s policy.
Treasurer Jim Chalmers told Guardian Australia last week he was “open” to big ideas on tax reform and would apply. Laser-focus on intergenerational inequality During the second period of labor.
It is unclear whether the new rules will be limited to property investors. Labor could also make grandfathering changes to make the deduction less generous or introduce a tiered model.
Greens senator Nick McKim is chairing a parliamentary inquiry into CGT arrangements, which is expected to recommend less generous rules for property investors.
“Evidence is piling up against the most unfair tax evasion in the country,” he said.
“Every time you crunch the numbers it gets worse.
“Instead of supporting productive investment, CGT relief is increasingly used to subsidize speculation on existing assets.
Prices and renters make home ownership more difficult.
McKim challenged Labor to overhaul CGT as part of its promise to tackle generational inequality in the Australian economy.
Last month, the NSW Treasury warned that current CGT rules would drive up property prices and damage housing affordability, reducing benefits for wealthy investors at the expense of first-time buyers.
Other tax concessions including CGT and negative gearing “Distort incentives towards property investment” And it said policies, including first home buyer assistance, should be cut.
Wentworth MP Allegra Spender – who led the development of the Independent Tax White Paper in the last Parliament – called for the CGT changes to be considered.
“I’m glad the Treasurer is open to reform, but changing one tax won’t address intergenerational inequality or housing affordability,” she said. “Tax changes should be revenue neutral, balanced by reductions.”
Research by the Grattan Institute suggests ending the CGT deduction without grandfathering the new rules could cost up to $6.5bn a year.
The Greens-led CGT inquiry is due to hold hearings later this month before a final report by March 17.
