Negative gearing and capital gains tax changes ignite debate over fairness and housing affordability

A generation that grew up with the promise of homeownership now finds itself weighing whether that future exists.

The political debate continues to intensify five weeks after the federal budget was announced, but for many young Australians the debate has become more personal; It has become a calculation about whether they can afford to stay in the country where they grew up.

The budget, drafted by Chancellor of the Exchequer Jim Chalmers as a response to housing stress and rising inequality, is being sold as a long-term reform designed to rebalance opportunity between generations.

Economists generally agree that this could work over time, but many also acknowledge that it could take decades for the benefits to emerge.

Sydney couple Emily and Simon Jeffery still dream of a house with a garden, but that dream is feeling increasingly unattainable, according to a report by 60 Minutes.

Ms Jeffery told the programme: “It would be nice to be able to afford something like this but obviously it’s not something we’re thinking about because it’s not a possibility for us.”

The couple, who are raising their young son River, said expectations that once felt normal have changed dramatically.

“When we were growing up, it was very normal to have a four-bedroom house with a garden,” he said.

Mr Jeffery said the pressure had become psychological as well as financial.

“It can be embarrassing, but it’s good to hold on to it in a way. It’s good to look forward to a position where you can achieve that,” Mr. Jeffery said.

But they believe the path to ownership has narrowed further under proposed changes, including negative gearing and capital gains tax concessions.

“They’re not helping. I don’t see how it helps our generation, that’s for sure,” Ms Jeffery said.

Mr Jeffery agreed, calling it “almost depressing”.

“It’s like the goalposts are constantly changing. It’s pretty frustrating,” he said.

The couple said disappointment had turned to mistrust, especially after earlier assurances that the underlying tax settings would not change.

“It almost feels like you’re being lied to. So how can you trust someone if they’re going to lie to you?” Mr. Jeffery said.

This sentiment is echoed by others entering adulthood in an increasingly competitive marketplace.

Anthony Kolmac, a 20-year-old law student and part-time worker, said he has already indulged in aggressive savings strategies just to get closer to deposits.

“I looked at the property market and saw how expensive houses were becoming in Sydney and thought, ‘I had to do something to differentiate myself,'” Mr Kolmac told the programme.

“Do you want to be able to afford your future? Don’t you want help?”

According to the government, the aim of the policy is to reduce investor-driven demand and increase affordability for first home buyers over time. But critics argue this risks damaging investment and small business confidence.

Small business owner Elaine Yong said proposed changes to capital gains tax have left her reconsidering her expansion plans and her family’s future security.

“The thought of losing half of my hard work has made me a little emotional this week,” Ms Yong said.

“What’s the point? It keeps going around in my head: ‘What’s the point of working so hard, trying so hard, risking so much, sacrificing so much?'”

However, the Treasury argues that reforms are necessary to address structural inequality and an increasingly inaccessible housing system.

“It takes courage to make these kinds of changes,” Mr. Chalmers said.

“We understand that the reaction from some groups will be harsh.

“It has been very difficult for young people to buy their first home and the aim of these changes is to remedy this.”

Still, economists warn that the transition period could leave a group behind, including those currently trying to enter the market.

Mr Chalmers defended the approach, arguing that the system had become skewed by investor advantages.

“There’s not much point in the housing market if the first few rungs of the ladder are missing,” he said.

He rejected claims that young Australians were being overlooked, saying the reforms also included short-term tax relief and broader changes to competition in the housing market.

For many, the question is no longer just whether the housing market is broken, but whether the solution has arrived in time for them to benefit from it.