Treasurer Confident Anger Over Capital Gains and Negative Gearing Changes Will Subside

Jim Chalmers has said he’s confident the reforms introduced in his budget won’t be held against Labor at the next election.

Australian Treasurer Jim Chalmers takes questions from the media at Parliament House in Canberra, Australia on May 13, 2026. Hilary Wardhaugh/Getty Images

Australians will remember the “substance” of the government’s changes to wealth creation channels and anger about the issue will have subsided by the next election, the treasurer says.

This year’s budget restricts the practice of negative gearing—a major way for Australians to build their wealth—to just new properties with the aim of incentivising investment in new supply.

Negative gearing allowed investors to invest in a property and deduct net rental losses against their wage, salary, or other personal income—lowering their tax burden.

Another major change is to capital gains tax, with the traditional 50 percent discount on the taxable profit of a sale, to be replaced by a 30 percent minimum tax on all capital gains plus inflation costs.

Jim Chalmers has told ABC Radio that he understood some people will consider it from the perspective of a broken election promise.

“But I think the substance of what is changing here is more important. We are delivering cost of living help and we’re delivering real change via the tax system. When you do that at every point in the history of this country, when there’s economic reform and especially tax reform, that is contested.

“Every time there’s tax reform, people say the sky will fall in, people say that it is disastrous. But typically what happens in time is people look back on big tax reform and wonder what all of the fuss is about. I’m confident that will happen again,” he said.

The legislation also introduces a $250 Working Australians Tax Offset (WATO) and a $1,000 standard deduction for work-related expenses.

“We’re making it easier for people, especially young people, to get a toehold in a difficult housing market,” he said. “It’s the most important part of the most ambitious tax reforms in more than a quarter of a century.”

The reforms have passed the Senate against opposition from the Coalition and One Nation after Labor cut a deal with the Greens.

As part of the deal, the government agreed to end an exemption that allowed self-managed superannuation funds to borrow money to invest in residential property and to delay a planned overhaul of the National Disability Insurance Scheme (NDIS) until at least August to allow the Greens additional time to seek more protections for people impacted by the proposed changes.

Targeted amendments have also been made to the draft legislation, following opposition from business owners, accountants, charities, tech start-ups, and the medical technology field, but Chalmers insisted this didn’t indicate the laws had been rushed.

“It’s not unusual when you’re doing big tax reform like this that there'd be consultation and that there will be multiple pieces of legislation,” he said.

“If you think about tax reform under John Howard’s government, on a couple of occasions they had something like 30 different pieces of legislation. We were very upfront at budget time that there would be more consultation and ... there will be subsequent pieces of legislation to implement other parts of the tax reform package ... that’s not unusual.”