The Albanese government’s proposed changes to Australia’s capital gains tax (CGT) system have sparked one of the biggest tax debates in recent years, with supporters arguing the reforms will improve housing affordability and critics warning they would discourage investment and economic growth.
Under the proposed reforms announced in the 2026 federal budget, the government plans to replace the existing 50 per cent CGT discount for assets held longer than 12 months with a new inflation-indexed model that includes a minimum 30 per cent tax rate.
The changes are expected to apply from July 2027, with existing investments likely to be grandfathered under transitional arrangements. The reforms would affect investment properties, shares and other capital assets.
One of the most significant impacts will be on family trusts and discretionary trusts, which are commonly used by small and medium businesses, farmers and investors to manage assets and distribute income tax-effectively.
Currently, trusts can access the 50 per cent CGT discount when assets are held for more than 12 months, with gains distributed to beneficiaries. Under the proposed changes, trusts would instead be subject to the reduced concession under the new indexed system, potentially increasing tax liabilities for beneficiaries receiving capital gains distributions. Tax experts have warned this could particularly affect intergenerational wealth transfers, succession planning for family businesses and investment structures commonly used by Australians approaching retirement.
Treasurer Jim Chalmers has defended the policy as a measure designed to improve “intergenerational equity” and reduce tax settings that encourage speculative investment, particularly in housing. The government argues the current CGT discount, combined with negative gearing, has distorted the housing market by favouring investors over owner-occupiers.
However, the reforms have generated strong opposition from business and investment groups. Critics argue the higher tax burden could reduce investment in shares, start-ups and small businesses while also undermining retirement savings strategies. Financial Services Council modelling suggested some investors could pay significantly more tax over time under the new system.
The Australian Chamber of Commerce and Industry (ACCI), of which ACAPMA is a member, has been among the organisations voicing concern about the tax policy changes. While ACCI has welcomed discussion around comprehensive tax reform, it has warned against measures that increase the overall tax burden on business and investment. In a post-budget statement, ACCI said higher taxes could “scare away investment” and weaken productivity growth in Australia.
Industry backlash has also come from the technology and start-up sectors. Business leaders have argued that reducing the CGT concession could discourage innovation and push capital offshore.
Politically, the reforms have become a political battleground between Labor and the Coalition. Opposition figures have labelled the policy an “assault on aspiration”, while the government insists the changes are necessary to create a fairer tax system and improve housing access for younger Australians.
ACAPMA will continue to work with ACCI and the Business Council of Australia to ensure that our members views are well represented at the highest levels of government.
ACAPMA
