Weeks out from Australia’s upcoming federal budget, Prime Minister Anthony Albanese has delivered the clearest hint yet that the center-left Labor government is prepared to eliminate a contentious capital gains tax concession that benefits property investors, as the administration navigates growing political pressure over rising housing inequality from the right-wing populist party One Nation.
For months, unconfirmed reports have circulated that the Albanese government is considering rolling back Australia’s generous 50% capital gains tax discount, a policy that applies to profits earned from selling assets held for more than 12 months, including residential investment property. For context, capital gains tax is levied on profits from asset sales such as property and shares, with those profits counted toward an individual’s annual taxable income. The existing 50% discount cuts the taxable portion of these gains in half for long-term asset holders.
Speaking to Nine Entertainment’s metropolitan publications on Monday, Albanese confirmed that the government is exploring policy changes beyond its existing push to expand national housing supply, a shift that comes as One Nation has sharpened its political messaging around housing affordability and systemic inequality to win over disaffected voters.
“The system needs to work for people,” Albanese said. “You don’t change that by rhetoric and by dividing people, which is what a lot of this populist rhetoric does. You do that by giving people a stake in the economy.”
Until this announcement, Labor’s national housing strategy has centered almost exclusively on boosting housing supply, anchored by its ambitious National Housing Accord that sets targets for new construction across the country. On Monday, the Prime Minister also signaled the government would increase spending on incentives to encourage state and territory governments to hit those housing supply targets, linking housing accessibility to broader national stability.
“Resilience is also about economic resilience and social cohesion, and making sure that young Australians understand they have a stake in the economy,” he said. “And housing is obviously one of the focuses of that.”
Currently, a Liberal Party-led Senate inquiry is examining potential changes to national housing tax policy. Earlier this year, prominent financial journalist and economist Alan Kohler told the committee that the existing tax structure sends “a clear signal that capital income is preferred over labour income,” a bias that he argues lies at the root of Australia’s widening wealth gap.
Kohler noted that while the discount is framed as an inflation adjustment, it is far larger than needed to offset rising prices, and has distorted the property market by encouraging speculative investment. This dynamic, he explained, has pushed up overall housing demand and increased the maximum price investors are willing to pay for residential property, pricing out many first-time homebuyers and low-income households.
The government’s openness to changes to the capital gains discount aligns with recent comments from Treasurer Jim Chalmers, who said last week that he would be “pretty happy” if the 2026–27 budget was remembered as a landmark “tax reform budget.”
Beyond housing tax reform, Albanese also signaled that the upcoming budget will include a sweeping overhaul of the National Disability Insurance Scheme (NDIS), Australia’s landmark social support program for people with permanent disability.
“The NDIS was there to assist people who have a permanent incapacity to fully participate in society – that’s something we need to value and cherish,” Albanese said. “It’s undermined if four out of 10 kids in a class are on the NDIS. That wasn’t why it has that public support, and we need to make sure that we maintain public support by ensuring it’s sustainable.”
The government has already moved to narrow eligibility for the scheme, proposing to shift support for children with mild autism to state and territory-run systems under the new Thriving Kids program. The reform has faced significant pushback, however, with state leaders refusing to take on the extra funding burden for the initiative. Albanese has explicitly ruled out introducing means testing for the NDIS, saying that eligibility should remain tied to an individual’s disability needs and their ability to participate in community and economic life, not their income or assets.