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Opposing Tax Reforms and Their Potential Economic Risks

Published July 31, 2026 at 9:02 PM UTC

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Although the Australian government's tax reforms are designed to improve housing affordability, they might have unintended negative effects on the economy. Eliminating the capital gains tax discount and banning negative gearing on existing homes could lead to decreased housing supply, as investors may be less willing to sell properties, resulting in fewer homes available to buyers. This could worsen the housing affordability crisis and push rental prices higher. Additionally, the cooling property market may reduce economic activity in sectors like construction, retail, and professional services due to lower spending and investment from fewer property transactions.