Why This Matters
- The findings challenge a key political narrative that Labor’s property tax overhaul will deter investment and push up rents.
- If investors pay less CGT than feared, the policy may have a milder impact on housing supply and prices than opponents claim.
- The research adds nuance to a debate that will shape the next election campaign, with housing affordability as a central issue.
Background
The e61 Institute, an independent economic research group, modelled the impact of Labor’s May 2026 budget reforms — which included changes to capital gains tax discounts and negative gearing — using real property data spanning nearly two decades. The analysis is the first to test the reforms against historical market conditions rather than relying on forward estimates.
Key Perspectives
Property investors and landlord groups: Likely to highlight the finding that half of landlords would have paid more under the reforms, arguing the changes still penalise a significant portion of the market.
The Albanese government: Expected to seize on the conclusion that most investors would pay less CGT, using it to counter accusations that the policy will crush investment.
Housing affordability advocates and economists: May welcome the research for showing the reforms are not the primary driver of investment demand, but caution that housing supply and rental affordability depend on broader factors.
What to Watch
- Subsequent analysis from other economic institutes and Treasury to confirm or challenge the e61’s findings.
- Rental vacancy rates and new housing starts over the next two quarters for evidence of any investment pullback.
- Political positioning — whether the Coalition or the Greens cite the research in their housing policy announcements.