Written

For

The

Australian

-

Labor’s

CGT

changes

unfairly

target

mum-and-dad

investors

while

mansions

remain

tax-free

Is it fair that a Point Piper billionaire can sell a $50m harbourside mansion and pay zero capital gains tax, while a suburban couple selling their single investment property for a $500,000 gain hands a hefty cheque to the ATO?

That's the absurdity buried in Labor's rumoured CGT changes. If the Albanese government genuinely cared about tax equity in property, it wouldn't be lining up mum-and-dad investors in its sights while leaving the family home – no matter how palatial – completely untouched.

Let's be honest about who owns investment properties in this country. The vast majority are working Australians who scraped together a deposit, took on debt, and bought a rental to build a nest egg or generate retirement income. Halving the CGT discount hits them squarely. Meanwhile, someone who bought a $20m mansion a decade ago and sells it today for $40m pockets the entire gain tax-free.

My view? If we're serious about fairness, introduce a threshold-based CGT that captures substantial gains on all property – family home included. Set the bar high enough to protect genuine homeowners and modest investors, but low enough to reach the truly wealthy currently shielded by our unlimited primary residence exemption. It's essentially the same logic Labor has already applied to Division 296 on super balances above $3m.

Looking overseas, this isn't radical. The US caps the family home exemption at US$250,000 for singles and US$500,000 for couples. South Africa, Germany, Spain and Switzerland all have time-based or price-based rules on primary residences.

And don't forget – the family home is also exempt from Centrelink's assets test at pension age, regardless of value. Sell down, buy a $20m Toorak estate, and you could still qualify for the full age pension.

Expect one other consequence if direct property CGT gets tougher: a rush into residential REITs and unlisted property funds. Investors always find a way around blunt instruments.