✍️ PETITION: Scrap the Capital Gains Tax Discount
If you earn more money, you should pay more tax. It’s as simple as that.
This basic principle is the very foundation of Australia’s progressive tax system.
But unfortunately, the capital gains tax discount means it’s actually the lowest-paid workers who end up paying a larger share of their additional income in tax. On the other hand, those earning huge incomes while watching the value of their assets increase, get a 50% tax discount off that increase.
By halving the amount of tax they pay, the capital gains tax discount distorts and makes a mockery of this basic principle of fairness.
More than 80% of the discount goes to the top 10% of income earners, according to recent Parliamentary Budget Office figures. And if that was not bad enough, almost 60% goes to the top 1%. That’s $13 billion a year going just to the top one percenters.
And that’s before we even consider the fact that the discount has pushed up house prices and made housing unaffordable.
If you think that’s outrageous, you’re not alone. There is growing momentum that the insanely generous capital gains tax discount needs to change.
Scrapping the capital gains tax discount would make housing more affordable, increase home ownership rates, and fix a fundamental inequality in our tax system.
✍ Sign here to call for the CGT discount to be scrapped in the 2026 Budget.
What is the capital gains tax discount?
- Capital gains are the profits made from selling or disposing of assets, such as property or shares.
- Currently, the capital gains tax discount means that capital gains are taxed at a lower rate to wages.
- If an asset you own goes up in price, you get half of that gain tax free. But if you were to go out and work for a living, none of your wage gets a tax discount.
- Those earning the most from capital gains are those with the highest incomes:
How does the capital gains tax discount affect house prices?
Australia Institute research has shown that:
- The capital gains discount combined with negative gearing has distorted the housing market and contributed to the decline in home ownership rates over the past 25 years.
- A major cause of rising house prices has been increased demand from investors.
- Restricting negative gearing to newly built housing and scrapping the capital gains tax discount would reduce speculation in the housing market and allow more first home buyers to get into their own home.
- Reducing tax concessions would also raise billions of dollars of revenue that can be used to build more housing.
To the Hon. Jim Chalmers MP, Treasurer of Australia --
The capital gains tax discount has made housing unaffordable, increased inequality, distorted lending, and is reducing investment and productivity.
It should be scrapped in the 2026 Budget.