Capital gains tax and negative gearing benefit the 1% and this chart shows it | Australian budget 2026
This year’s federal budget includes negative gearing and changes to capital gains (CGT) and discretionary trust tax concessions that some blame for fueling housing speculation and disproportionately benefiting the wealthiest.
The top 1 percent of lifetime earners alone received more than $700,000 in tax breaks from capital gains tax, negative treatment and discretionary trusts over their working lives, according to figures in the budget.
In 2022-23 – latest data – the top 10% of earners benefited from capital gains tax relief by 83% and negative tax relief by 37%. The vast majority of both’s earnings went to people earning above the median income at the time, $58,216.
Capital gains taxes are taxes paid on profits (“gains”) when you sell an asset, such as a home, for a profit. Under changes made in 1999, investors get a 50% discount on capital gains tax if they hold the asset for more than a year.
Negative gearing (what the Treasury calls a “rental loss”) is when an investment property suffers a loss (for example, if the rental income fails to pay the mortgage) and the losses are tax deducted from the landlord’s income.
The vast majority of both tax benefits went to those earning above median income.
Only 71% of more than 1 million tax filers in 2022-23 benefited from capital gains tax relief. Almost all (95%) of these went to Australians earning above average income.
But there is great inequality even among the better off; More than half of the capital gains tax benefit went to the top 1% of earners.
