Written

For

The

Australian

-

Calls

for

capital

gains

tax

to

boost

housing

to

have

impact

on

housing

mix,

investors

Remember 2019? Labor walked into what everyone thought was a certain election win, only to be shown the door by voters — largely because they dared touch capital gains tax on investment properties. Betting agencies had already paid out on a Labor victory. Ouch.

Fast forward to today, and CGT reform is creeping back onto the agenda. This time it's not Labor itself waving the flag, but the McKell Institute — a think tank named after a former Labor premier — proposing what it calls a "circuit-breaker" to fix housing supply.

Here's the pitch: if you buy a brand new apartment as an investment and hold it for 12 months, you'd get a 70% CGT discount instead of the current 50%. But buy an established house? Your discount drops to 35%. Existing investments would be grandfathered.

The Institute reckons this could deliver an extra 130,000 dwellings by 2030 by nudging investors away from bidding up established homes and towards funding new construction. The Greens, predictably, want to go further and scrap the discount altogether.

My take? The intention is reasonable — Australia genuinely does have a supply problem, and older investors piling into established detached houses does squeeze out first-home buyers. But I have real concerns about the execution.

Sydney accountant Caxton Pang made a sharp point in the piece: not every community suits high-rise apartment blocks. Some need townhouses, some need detached homes. A blunt tax lever risks distorting the housing mix rather than solving it.

And Luke Star's warning is one I've made repeatedly — tax-driven investment decisions typically backfire. Chasing a CGT sweetener on a poorly located, badly built apartment block is a fast track to regret. Fundamentals still matter: location, build quality, rental demand.

Politically? Reducing CGT concessions on established property is nitroglycerin. Just ask Bill Shorten.