The Australian Labor government will restrict negative-gearing tax concessions to new-build homes and properties purchased after the May 2024 budget night [1].
This policy shift targets the residential property market to curb investor activity in existing homes. By limiting these tax advantages, the government aims to improve housing affordability and fairness for first-time buyers, while encouraging the construction of new dwellings [1, 2, 3].
Under the new rules, negative-gearing concessions will be available for new-build properties, but restrictions will apply to existing homes acquired from the budget night in May 2024 [1, 3]. The government also plans to wind back capital gains tax (CGT) discounts as part of the broader overhaul [2].
These changes are scheduled to take effect from July 2025 [1, 4]. To further support the residential sector, the budget includes a $2 billion housing boost [4].
Government officials said the measures are designed to support the supply of new housing. By shifting the incentive away from existing stock, the policy intends to reduce the competitive pressure investors place on individuals seeking a primary residence [1, 2, 3].
The overhaul represents a significant change to one of Australia's most debated tax mechanisms. The focus on new builds suggests a strategic effort to address the national housing shortage by linking tax benefits directly to the creation of new inventory [1, 3].
“Labor plans to restrict negative-gearing tax concessions to properties purchased after the budget night”
This policy transition signals a move away from a broad tax incentive for property investors toward a targeted industrial policy for housing supply. By removing the negative gearing advantage for existing homes, the government is attempting to decouple investor demand from the available stock of established houses, potentially lowering the entry barrier for owner-occupiers while using the $2 billion boost to stimulate new construction.
