{"id":640339,"date":"2026-04-30T10:12:08","date_gmt":"2026-04-30T10:12:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/640339\/"},"modified":"2026-04-30T10:12:08","modified_gmt":"2026-04-30T10:12:08","slug":"massive-profits-already-earned-by-property-investors-to-be-shielded-from-chalmers-cgt-changes-jim-chalmers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/640339\/","title":{"rendered":"Massive profits already earned by property investors to be shielded from Chalmers\u2019 CGT changes | Jim Chalmers"},"content":{"rendered":"

Massive paper profits earned over recent years by property investors will be shielded from Labor\u2019s changes to the CGT discount, after Jim Chalmers<\/a> said any new tax rules would \u201crecognise the decisions that people have taken in the past\u201d.<\/p>\n

The treasurer is widely expected to modify the 50% tax discount on profits from the sale of assets held for more than one year, potentially returning to the pre-1999 model where capital gains are adjusted for inflation.<\/p>\n

With negative gearing rules also in the government\u2019s sights, investors and some experts have called for any changes to tax rules to only apply to new investments \u2013 an approach known as \u201cgrandfathering\u201d.<\/p>\n

Chalmers said the government was mindful of \u201ctransitional issues\u201d around tax changes, suggesting that only the future gains on an existing investment would be subject to the new CGT rules.<\/p>\n

Sign up for the Breaking News Australia email<\/a><\/p>\n

\u201cWithout getting into hypotheticals about policies, what you try and do is to make sure that we recognise the decisions that people have taken in the past,\u201d he told the CommBank View podcast.<\/p>\n

Luke Yeaman, CBA\u2019s chief economist and a former Treasury deputy secretary, said that the \u201csimple, clean\u201d option was to apply the new tax rules only to investment made after budget night.<\/p>\n

\u201cIf you do a partial or staged form of grandfathering you would get additional revenue in the door more quickly, but you would add complexity to the system, which I think is a risk,\u201d Yeaman said.<\/p>\n

In response to a question about changes to investor tax settings, Chalmers said \u201cone of the things that I think is not well understood in the speculation is that \u2013 even if we went down the path that has been speculated about in those areas that you\u2019ve asked me about \u2013 people shouldn\u2019t expect there to be this huge amount of new revenue show up over the course of the next few years in the budget\u201d.<\/p>\n

The Grattan Institute has calculated that halving the capital gains tax discount and phasing it in over five years to include all investments would generate $6.5bn a year for the budget.<\/p>\n

In contrast, a fully grandfathered policy package of returning to the pre-1999 inflation-adjusted capital gains tax regime and scrapping negative gearing would generate just $2bn in extra revenue in the first four years, according to recent estimates by CBA.<\/p>\n

But the benefits to the budget bottom line would grow over time, with revenue gains estimated at $25-30bn over the first 10 years \u2013 although whether investors end up paying more or less capital gains tax than under the flat 50% discount would depend on economic conditions, the bank said.<\/p>\n

The treasurer also signalled that scaling back tax breaks for landlords would not necessarily make homes cheaper<\/a> but could rebalance the \u201ccomposition\u201d of home ownership away from investors and towards owner-occupiers.<\/p>\n

\u201cWe\u2019re not trying to target a certain change necessarily in price,\u201d he said.<\/p>\n

\u201cI think anyone who looks objectively at the way that home ownership rates have declined over time and proportionately as well, homeowners and owner occupiers versus investors, there\u2019s been a long-term trend.<\/p>\n

\u201cI think that even if you just go back to around the turn of the century, those changes that were made to capital gains [to the current regime in 1999], you can see that that\u2019s had an impact in the composition of the housing market.<\/p>\n

\u201cWe\u2019ve made it really clear for some time now that we think that there are intergenerational issues in the tax system and in the housing market. We\u2019re working through ways to try and address that.\u201d<\/p>\n

Economic modelling suggests changes to tax settings for investors could lower home prices by between 1% and 4%, but that it could lift home ownership rates by three percentage points as investors are discouraged from buying property.<\/p>\n

He said boosting housing supply was \u201cthe main game\u201d for more affordable homes.<\/p>\n

\u201cWe care about there being affordable options for people. The biggest challenge in the housing market is we don\u2019t have enough homes but we\u2019re also focused on the composition of the home ownership base.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Massive paper profits earned over recent years by property investors will be shielded from Labor\u2019s changes to the…\n","protected":false},"author":2,"featured_media":640340,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-640339","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/640339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=640339"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/640339\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/640340"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=640339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=640339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=640339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}