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As Finance Minister Jim Chalmers considers changes to the capital gains tax, new research shows property tax cuts would cost the federal budget more than $200 billion over the next decade, with benefits flowing mainly to property investors in the nation’s wealthiest electorates.
The study by the Australian Council of Social Services shows that one-fifth of the $23.5 billion tax benefit from the 50 per cent concession on capital gains tax was gained by residents of just five of the country’s electorates, all of it in Sydney.
Separate research compiled for the Australian Greens by the independent Parliamentary Budget Office shows that over the next decade, the cost of the CGT concession and negative gearing to the federal budget will rise from $15 billion to $24 billion a year by the middle of the next decade.
The government is considering changes to CGT and negative gearing as part of its May budget, which Chalmers said would include austerity measures and policies aimed at boosting productivity across the economy.
This week, teal MP Allegra Spending published a tax brief advocating CGT and negative gearing changes to help pay for a $30 billion a year cut to personal income tax.
ACOSS research showed that the biggest beneficiaries of the CGT relief were taxpayers in Wentworth electorates in Wentworth, worth $1.8 billion, or $13,450 per taxpayer.
The top 10 electorates, which include wealthy conurbations such as Sydney, Melbourne, Brisbane and NSW’s Southern Highlands, accounted for a third of CGT benefits. Five of those electorates were held by teal independents like Spending, while Goldstein in Melbourne was won by shadow treasurer Tim Wilson in the 2025 election.
The bottom 10 voters, almost all of the Labor-held seats in regions such as Adelaide, Perth and the Northern Territory, accounted for less than 2 per cent of the fiscal gain.
ACOSS CEO Dr Cassandra Goldie said it was clear that the CGT franchise was funneling billions of dollars every year to the country’s wealthiest parts.
“This is money that can be invested in social housing, essential services, income support and social housing.
Communities that need support most. Instead, it is used to reinforce inequality. “This is not a fair or reasonable use of public funds,” he said.
“When a policy so clearly increases inequality while increasing house prices, it must be in the national interest for urgent reform.”
The Greens are pressing Chalmers to use the budget to significantly reduce tax breaks for the property sector.
The party’s analysis commissioned from the budget office shows that negative tax cuts would result in lost revenue of $6.9 billion, while the CGT concession would cost $8.5 billion. If concessions are left unchanged, the total loss of forgone revenue will be $205 billion over the next decade.
Similar to ACOSS research, it has been confirmed that the biggest winners from the current tax environment are high-income earners.
This year, $5.9 billion of the $8.4 billion in revenue from the CGT concession will be from people earning more than $142,000. 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 biggest beneficiaries, with $827 million in total CGT concessions and $1.3 billion in negative gearing gains.
The smallest beneficiaries of the CGT concession are people earning between $10,100 and $22,400 ($97 million). They also earned $155 million from negative gearing.
The Greens’ housing spokeswoman, Barbara Pocock, said the government was spending billions of dollars on property tax breaks that could be used on public housing.
“First home buyers don’t stand a chance because the government has allowed investor lending to become excessive, supported by CGT relief and negative gearing,” he said.
“Labour must put an end to runaway house price inflation caused by bad policies and tax breaks for property hoarders. It must end unlimited rent increases.”
The Greens-initiated Senate inquiry into the CGT concession is expected to be announced next week.
In response to questions about the notice of the inquiry, former Treasury secretary Ken Henry, whose 2010 tax report advocated reducing concessions, rejected suggestions that a change to CGT would lead to a sharp decline in rented homes.
If investors leave the market, potential owners will have a chance to enter the market, he said.
“Any reduction in home purchases by investors as a result of reduced rental property tax concessions is likely to be replaced by home purchases by those who own homes today,” he said.
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Shane Wright is senior economic correspondent for The Age and The Sydney Morning Herald.Connect with: X or email.
