Investopoly Ep 400: CGT discount changes: what property investors should do now
Mar 17, 2026
A deep dive into proposed capital gains tax changes and how they could reshape property investing. Discussion of alternative tax systems, CPI indexation history, and modeling of after-tax returns over 30 years. Comparison of property versus share investing if tax advantages shift. Lessons from UK landlord tax reforms and potential impacts on rental supply and affordability.
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Supply Drives House Prices Not Investor Tax Perks
- The dominant driver of Australian house prices is supply, not investor tax incentives.
- Stuart Wemyss cites Grattan Institute modelling showing tax settings like CGT only inflate prices at the margin while population and inadequate housing supply drive affordability issues.
Big Revenue Claims Depend On Unrealistic Behavioural Assumptions
- The Greens' $247 billion figure assumes full removal of the CGT discount and no behavioural change, which inflates the estimated revenue gain.
- Stuart explains that if the discount was removed investors would change behaviour, making that headline number unrealistic.
50% Discount Is More Generous Than Old CPI Indexation
- The 50% CGT discount (since 1999) is generally more generous than the old CPI indexation system used from 1985 to 1999.
- Stuart notes break-even inflation is around 40%, so a reduced discount near 40% would align roughly with the old indexation approach.
