Negative gearing, in combination with the capital gains tax (CGT) discount, contributes to low effective tax rates on property investments. These tax advantages have increased the share of housing owned by investors, at the expense of Australians looking to buy a home. This Impact Analysis Equivalent (IAE) considers reforms to negative gearing and CGT arrangements. It sets out the problem being addressed, the proposal, the assessment outcome and the regulatory burden.

For this IAE, the Treasury has drawn on the Report of the operation of the capital gains tax discount; 2026-27 Budget, Budget Paper No. 1 – Budget Statement 4: Tax reform for workers, businesses and future generations; together with the Supplementary Analysis prepared by Treasury.

The Treasury estimates the changes would increase average regulatory costs by $88.4 million per year. 

Assessment of the impact analysis: Impact Analysis Equivalent.