The Senate Select Committee on the Operation of the Capital Gains Tax Discount tabled its report on Tuesday. In short, it found that Australia’s current tax system favours investors and fuels intergenerational inequality. But the Coalition maintains the CGT discount is “working as intended.”
Thu 19 Mar 2026 01.00
Photo: AAP Image/Mick Tsikas
The Senate Select Committee on the Operation of the Capital Gains Tax Discount tabled its report on Tuesday. In short, it found that Australia’s current tax system favours investors and fuels intergenerational inequality.
But the Coalition maintains the CGT discount is “working as intended.”
Liberal Party committee members Senators Andrew Bragg and Dave Sharma issued a dissenting view opposing any change to the CGT discount, describing the majority report as a “simplistic and one-dimensional analysis … which sidesteps the biggest factor in the housing system—supply”.
In their dissenting view, senators Bragg and Sharma stated that “Supply of housing has collapsed in Australia as the population has surged” and that “The idea that Australia’s housing woes could be solved by one tax tweak is as shallow as it is cruel”.
So, how accurate is that?
The Facts:
Despite what Bragg and Sharma say, over the past 10 years, housing supply has actually grown faster than the population. The number of dwellings has increased by 19%, while the population has grown by just 16%.
This is also true if we look back further: from 2001 to 2021, the population grew by 34%, while the number of dwellings increased by 39%. Yet, despite dwellings outpacing population growth, house prices have increased by 70% – far quicker than household incomes.
So, what is causing the crisis?
The housing affordability crisis isn’t due to a lack of homes, but who is buying them all up. Australia has more houses and apartments — in absolute terms and per person — than we did in the 1960s. But the percentage of dwellings owned by property speculators and holiday-home owners has also been rising steadily since the mid-1960s.
Evidence shows that it is property investors who are driving the crisis in housing affordability. Research by the Australia Institute found that the 50% CGT discount has introduced a distortion to the tax system that favours the wealthy and increases inequality. The discount acts as an incentive for housing investors that allows them to outbid prospective owner-occupiers and placed home ownership outside the reach of many.
Australia has more than enough houses, they’re just owned by investors.
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As we approach the Federal Budget, speculation is swirling about changes to the Capital Gains Tax (CGT) discount and negative gearing. And just yesterday a senate committee handed down its report on the CGT discount after hearing evidence that it worsens inequality and encourages property investors to gamble on housing.
