The Setup
The Albanese government is set to announce changes to negative gearing and the capital gains tax discount in the May 12 budget. It will be framed as a landmark moment for housing affordability and intergenerational equity. It is neither. It is a modest tax adjustment to second-order mechanisms in a system whose first-order problems are not being touched.
Here is what the policy is, why it matters at the margin, and why it does little to fix housing purchase affordability and may even harm rental affordability.
