The Australian Coalition opposition has pledged to introduce a "Tax Back Guarantee" to index income-tax brackets to inflation and repeal Labor property tax changes.

This policy shift represents a direct challenge to the current government's federal budget reforms. By targeting negative gearing and capital gains tax, the Coalition aims to attract voters who feel the impact of bracket creep and increased investor taxes.

Opposition Leader Angus Taylor (Coalition) said the party will repeal Labor's property tax changes and introduce a permanent system to index income tax brackets to inflation [1]. The Coalition describes Labor's current approach as an "inflation tax" that penalizes taxpayers as their nominal incomes rise without corresponding bracket adjustments.

Shadow Treasurer Tim Wilson (Coalition) said the Tax Back Guarantee will end Labor's inflation tax [3]. Wilson said the Coalition will bring back generous rules for property investors and scrap the capital gains tax (CGT) discount overhaul [2].

According to reports, the Coalition expects to spend $22 billion on income-tax cuts associated with the Tax Back Guarantee [1]. This spending plan stands in contrast to Labor's recent measures, which included restrictions on negative gearing applying only to new builds starting May 12, 2026 [4].

Furthermore, the Coalition intends to reverse the plan to replace the CGT discount with inflation indexation, a move Labor scheduled to begin in July 2027 [4]. The Coalition argues that these reforms would stifle investment and discourage property ownership across the country.

Wilson said the move is necessary to protect the financial interests of Australian investors and homeowners from government overreach [2]. The announcement, made in mid-May, sets the stage for a significant fiscal debate as the country moves toward the next election cycle.

“"We will repeal Labor's property tax changes and introduce a permanent system to index income tax brackets to inflation."”

The Coalition's proposal creates a sharp ideological divide over the role of tax indexation and property investment. By promising to index brackets and restore negative gearing, the opposition is betting that voters prioritize immediate tax relief and investment incentives over the government's efforts to modify the housing tax landscape and increase revenue through CGT changes.