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Property tax breaks will cost the federal budget more than $200 billion over the next decade, with the benefits overwhelmingly flowing to property investors in the nation’s wealthiest electorates, new research shows as Treasurer Jim Chalmers considers changes to capital gains tax.
Work done by the Australian Council of Social Services shows that a fifth of the $23.5 billion in tax benefits that flow from the 50 per cent concession on capital gains tax is captured by residents in just five of the nation’s electorates, all of which are in Sydney.
Separate research compiled by the independent Parliamentary Budget Office for the Australian Greens shows that over the next decade, the cost to the federal budget from the CGT concession and negative gearing will climb from $15 billion a year to $24 billion by the middle of next decade.
The government is considering changes to CGT and negative gearing as part of a May budget that Chalmers has said will contain savings measures and policies aimed at boosting productivity across the economy.
This week, teal MP Allegra Spender released a tax white paper that advocated for CGT and negative gearing changes to help pay for a $30 billion-a-year cut in personal income tax.
The ACOSS research showed taxpayers in Spender’s electorate of Wentworth are the biggest beneficiaries of the CGT discount, accounting for $1.8 billion – or $13,450 per taxpayer.
The top 10 electorates, encompassing wealthy enclaves of Sydney, Melbourne, Brisbane and NSW’s Southern Highlands, accounted for a third of the CGT benefits. Five of these electorates are held by teal independents such as Spender, while one, Goldstein in Melbourne, was won by shadow treasurer Tim Wilson from a teal at the 2025 election.
The bottom 10 electorates, almost all Labor-held seats in areas including Adelaide, Perth and the Northern Territory, accounted for less than 2 per cent of the financial benefit.
ACOSS CEO Dr Cassandra Goldie said it was clear that the CGT concession funnelled billions of dollars every year into the wealthiest parts of the country.
“This is money that could be invested in social housing, essential services, income support and the
communities that need support the most. Instead, it’s being used to supercharge inequality. That is not a fair or sensible use of public funds,” she said.
“When a policy so clearly supercharges inequality while driving up home prices, it simply must be in the national interest for urgent reform.”
The Greens are pushing for Chalmers to use the budget to dramatically cut tax breaks for the property sector.
Analysis the party commissioned from the budget office shows that negative gearing tax deductions will result in $6.9 billion in foregone revenue, while the CGT concession would cost $8.5 billion. Over the coming decade, the total hit to foregone revenue would be $205 billion if the concessions are left unchanged.
Similar to the ACOSS research, it confirmed that the biggest winners from current tax settings are high-income earners.
This year, people earning more than $142,000 will account for $5.9 billion of the $8.4 billion in foregone revenue from the CGT concession. They will also accrue $3 billion of the $7.5 billion in negative gearing benefits.
People earning between $104,901 and $142,000 will be the next largest beneficiaries at $827 million of total CGT concessions and $1.3 billion in negative gearing gains.
The smallest beneficiaries from the CGT concession are those people earning between $10,100 and $22,400 at $97 million. They also gained $155 million from negative gearing.
Greens’ housing spokesperson Barbara Pocock said the government was wasting billions of dollars on property tax breaks that could be instead used on public housing.
“First-home buyers don’t stand a chance because the government has allowed investor lending to run rampant backed by the CGT discount and negative gearing,” she said.
“Labor must end the runaway housing price inflation driven by bad policy and tax breaks for property hoarders. It must end unlimited rent increases.”
A Greens-initiated Senate inquiry into the CGT concession is due to report next week.
In answers to questions on notice from the inquiry, former Treasury secretary Ken Henry – whose 2010 tax report advocated a reduction in the concession – pushed back at suggestions that a change to the CGT would lead to a sharp reduction in rental homes.
He said if investors left the market there would be chance for prospective owner-occupiers to get into the market.
“Any reduction in house purchases by investors as a consequence of reduced rental housing tax concessions is more likely today to be replaced by house purchases by owner occupiers,” he said.
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