Capital Gains Tax Changes Will Make Housing WORSE (Here’s Why)

This CGT change could push rents higher and reduce housing supply.

Will capital gains tax changes fix Australia’s housing crisis — or make it worse?

In this video, I break down the proposed Capital Gains Tax (CGT) changes in Australia and explain why they could actually increase rents, reduce property listings, and worsen the rental crisis.

The idea behind taxing property investors more is to improve housing affordability — but when you understand how supply and demand actually work in the Australian property market, the outcome may be very different.

Here’s what we cover:

• How capital gains tax works in Australia
• Why higher CGT may reduce property listings
• The impact on rental supply
• Why rents could increase
• The truth about “mum and dad” property investors
• Australia’s public housing shortage (just ~3.8%)
• Why housing supply is the real issue

Australia is already behind on its 1.2 million home target. If supply doesn’t improve, policy changes that discourage property investors may unintentionally make housing affordability worse — not better.

If you’re a:

• Property investor
• First home buyer
• Renter
• Or planning to enter the Australian property market

This affects you.

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Want a breakdown of how this impacts your specific situation? Comment “CGT” below.

Transcript

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CGT Proposal Overview

SPEAKER_00 0:00

Labor is proposing capital gain tax changes within 2026. If they make these changes, rents will rise, listing levels will drop, and property will not become more affordable. If you currently own property or you're planning to own property, this is going to affect you.

Why Higher CGT Raises Prices

SPEAKER_00 0:20

What they are proposing is that if you sell an investment property, you are going to be paying more tax on the profit you make. The idea with this is that we tax more investors and it's going to make property more affordable. The reality of this is that it's going to do the exact opposite. And in today's video, I'm going to explain to you how that is going to take place.

Fewer Listings And Scarcity

SPEAKER_00 0:41

Number one is that people are going to hold property longer than they do so already. If they're going to have to pay more when they sell, a lot of people are simply not going to sell when potentially they would have. Number two is that if they sell less, if they put their properties on the market less, there's going to be less listings available. Right now, in many locations within Australia, listing levels are below the five-year average. This will further affect supply negatively and there'll be less supply available and less listings. This is the part that the government do not get. Less supply means less competition. If there is less supply with the same level of demand, this creates scarcity and this creates growth. It does not make property prices drop or more

Investor Pullback And Rent Surge

SPEAKER_00 1:27

affordable. Now, number four is this is going to dissentivize investors to go out and purchase property. The reality is that there is going to be a percentage of people that do not play the game. Less investors means less rental properties available on the market. This is another one the government does not understand. If there's less investors, there's less rental properties available, and this negatively impacts tenants. We currently have a rental crisis going on in this country, and it's only going to put more pressure on this. Less supply in the rental market with high levels of demand is going to mean that rents push higher. This is going to make the rental crisis worse and it's going to push vacancy rates lower.

Public Housing Shortfall

SPEAKER_00 2:10

Now it's important to note that the Australian government only offers 3.8% public housing within Australia. These stats have been declining for decades, and in comparison to other countries, they are extremely low. We need to stop demonizing landlords within this country. If the government is only providing 3.8% public housing, we simply need private landlords within this country. If we do not have landlords investing in property, we will continue to have a rental crisis going on within the country with extremely low vacancy rates. Another factor to consider is that there is 71% of property investors that own just one property. They are not property moguls, they are simply mom and dad investors. This statistic right here is why we have a rental crisis going on in this country.

Policy Lessons And FOMO Spike

SPEAKER_00 3:02

Now we've already seen what takes place when the government tried to positively influence affordability within this country. The prime example of this is the cap increases in October 2025. They designed this to make it more affordable and easier for first home buyers to get into the marketplace. Now the reality of this is it created FOMO and prices in many locations jump 50 to 100K in a matter of months. The reality is if you restrict supply and you incentivize demand, property prices will not become more affordable. It will put pressure on prices and capital growth will take place.

Stamp Duty Revenue Fallout

SPEAKER_00 3:41

And there is a massive consequence that people are not factoring in with these changes. If the tenure of holding a property increases, this is going to negatively impact state governments because they're going to receive less stamp duty revenue. Stamp duty revenue is a massive part of state budgets. If the state government are going to have reduced revenue from stamp duty, what are they going to do to make up for these losses? They're usually going to increase taxes in another area to make up and combat this.

Build More Homes, Not Barriers

SPEAKER_00 4:12

If the government wants to positively influence affordability, they must focus on adding more supply. They have set the target of 1.2 million homes and they are far behind on this target. The issue is not with property investors, it is with the supply in this country. They need to be focusing their energy on building more homes and not trying to negatively impact property investors who are providing a solution within

Your Take And Subscribe

SPEAKER_00 4:38

this country. I want to hear from you and see what your thoughts are on this change. Do you think it's going to make it more positive or more negative within the Australian residential real estate space? Make sure you hit subscribe if you want to see more property and finance related information.