Budget 2026 Australia: Jim Chalmers announces capital gains tax and negative gearing reform for housing

Labor’s ambitious and politically risky tax reform aims to help first home buyers and foster intergenerational fairness

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Jim Chalmers has announced the most ambitious and politically risky tax changes since the Howard era as part of a federal budget that defies the looming economic threat of the Iran war to push Australia along the “hard road to reform”.

Arguing that the Australian public is ready for difficult choices aimed at reviving intergenerational fairness and the collapsing dream of home ownership, the government will scale back tax breaks for landlords by abolishing negative gearing for new investors and replacing the 50% capital gains tax discount with the inflation-linked approach that existed before 1999.