Two months ago, Alyssa Shaw relocated from Melbourne's southern suburbs to its north-west, marking her 25th move in 15 years. The 36-year-old has been working since age 14, yet she lacks the stability her parents enjoyed. "I started renting at about 21. I stopped counting a little while ago but ... I did the calculation once and it was averaging [moving house] every nine months," she says. Shaw acknowledges that the Albanese government's changes to property tax concessions are "meaningful" for some, but they won't assist renters like her who are far from affording a home.
Government's Tax Reforms and Their Impact
Designed to facilitate home ownership, the tax reforms announced in Tuesday's federal budget will, with few exceptions, remove negative gearing benefits for investment properties purchased after 7:30 PM on budget night, effective from 1 July 2027. The 50% capital gains tax (CGT) discount will also be replaced at that time. However, the changes are projected to slow property price growth by only 2% over the next couple of years.
The Albanese government expects these reforms to reduce investor demand and help an additional 75,000 Australians become homeowners over the next decade, with even more first-home buyers benefiting later. The changes are grandfathered, not applying to properties bought before 12 May 2026. Treasury anticipates that the benefits of negative gearing for existing investors will phase out after about ten years.
Minimal Effect on Rents
Treasury modelling suggests the impact on rents will be minimal, with an extra A$2 per week for a household paying the median rent. Shaw, who works full-time but struggles to save for a deposit as a single person, believes housing inequity is harming the "health and hope" of young and working-class Australians. She advocates for rental caps, noting her rent increased by 44% over five years while her income did not keep pace.
Prof Wendy Stone, a housing expert at Swinburne University, describes the budget as taking "some bold first steps" toward altering structural conditions that have driven property-related housing inequality. However, she adds, "For people who are likely to be long-term renters this budget doesn't necessarily change that picture."
Political Reactions
The Coalition has vowed to repeal Labor's changes to negative gearing and CGT if they win government, while the Greens argue that the reforms entrench existing inequality by locking in tax breaks for multi-property owners.
Koushalya Pereiaslov, who has rented her entire life, thinks the changes are "great" but insufficient for her. After being priced out of the Gold Coast, she moved to the northern rivers region of New South Wales and has moved on average once a year. "To be honest it's been my dream since I was probably three years old," says the 26-year-old, who lives in a rented share house. "I'm a child of a single mum ... we've been buying lotto tickets with my grandma since I was three and dreaming, 'Oh this is what [the house] would be like'."
Pereiaslov, a support worker for National Disability Insurance Scheme participants, spends up to half her income on rent, making saving for a deposit impossible "when life is so expensive." She knows single mothers forced to move due to unaffordable rents. "I always feel that someone else is kind of writing my story for me and I'm not in control of where I want to be and how I want to get there," she says.
