With the May 12 Budget looming, a ‘leaked’ plan from Treasurer Chalmers has all the hallmarks of a Blackadder episode — a bold, supposedly brilliant scheme that just might work, if politicians can keep their hands off it!
It’s leak time for the Budget! And like Rowan Atkinson’s famous Blackadder sidekick, Baldrick, Treasurer Jim Chalmers has a “cunning plan” to lower the capital gains tax discount and believe it or not, make it look like a virtuous and good policy decision that will also help fill “the biscuit barrel”.
The leak comes from the Daily Mail’s Peter van Onselen (PVO) who says he has the inside info on what will be in this upcoming Budget for property investors, who’ve enjoyed a 50% discount on their investment properties if they were held for over a year, along with the tax benefits of negative gearing.
PVO says Chalmers (let’s call him Baldrick) has won the approval of Anthony Albanese (aka Blackadder) for his cunning plan.
This is it in a nutshell, with bad news first:
- The capital gains tax on older homes will be slashed, possibly to 35%.
- Investment into new houses will keep the 50% CGT discount.
- New apartments and townhouses will get a 70% CGT discount!
- Negative gearing won’t be changed to avoid the election curse of Bill Shorten!
- And existing investors would have their current properties’ CGT discount grandfathered.
PVO says the Treasurer has been influenced by a 2025 McKell Institute Report by UNSW Professor Richard Holden and the institute’s CEO Edward Cavanough. However, some of these main points from this sensible Report could be changed after other ministers and Treasury mull over the budget bottom line implications of these changes.
Obviously, while Chalmers will keep the good news for a big housing headline that will say Labor is helping fix our shocking supply of homes problem, there still could be some tinkering, such as the grandfathering clause might only apply to one or two properties held by investors.
While such a change would deliver less financial benefit to the budget, it wouldn’t offend Labor voters with an investment property or two. Meanwhile those with more than one or two rented out properties are probably committed Labor party haters, which means the political impact is hardly negative for the Government.
On the other hand, economists will praise the impact on the supply of housing from a CGT discount of 75% on new apartments and townhouses, while property developers and builders will be popping champagne because these changes will create a new supply of buyers for newly built apartments and other detached homes.
Driven by the McKell Institute, this plan is a cunning one, but only interfering politicians could ruin it.
And for those who were never Blackadder fans, here’s a look at one of Atkinson’s insulting conversations with Baldrick, played by Sir Tony Robinson:
Blackadder: “Pass the biscuit barrel” (that’s almost empty).
Baldrick: “Don’t worry Mr B, I have a cunning plan to solve the problem”.
Blackadder: “Yes Baldrick, let us not forget that you tried to solve the problem of your mother’s low ceiling by cutting off her head”.
Classic stuff! And oh so appropriate for the Treasurer hatching a Budget plan with his PM.
Just what we need…..
Lots of cheaply made, ugly, shoebox apartment blocks popping up here there and everywhere so investors can look for a 70% discount.
This country used to be so good
This is a pretty lazy take that ignores how basic economics actually works.
Australia’s problem isn’t “too many apartments” — it’s that we haven’t built enough homes for years while the population kept growing. You can’t scream about housing being unaffordable and then whinge when someone tries to increase supply. Those “shoebox apartments” you’re mocking are exactly what younger people, renters, and downsizers can actually afford. Not everyone is holding out for a 4×2 on a quarter acre in 1995.
And the whole “investors chasing a 70% discount” line completely misses the point of the capital gains tax changes. The proposal is about reducing tax distortions that push money into speculation instead of productive investment. For years, generous concessions have helped inflate property prices by rewarding people for piling into housing as an asset class rather than a place to live. Dialling that back isn’t “ruining the country” — it’s trying to stop it becoming a playground only for those who already own multiple properties.
If anything, what “used to be so good” was a time when housing was actually attainable. Defending a system that locked that door behind you isn’t nostalgia — it’s just protecting your own position while pretending it’s about standards.
its so simple just allow 100% discount on one investment property regardless of age,and no discount on other invesntment properties,how many houses do you need for goodness sakes,this may actually free up more properties for sale thus lowering buy price and make renting more affordsble
I agree with CC above just what we want more high rise apartment blocks so we look like Singapore or New York. Particularly when the amount of people dumped in a confined space does not have the infra-structure to support it. ie Schools, Hospitals, Roads.
This argument sounds reasonable on the surface, but it falls apart pretty quickly.
No one is “turning Australia into New York or Singapore.” What’s actually happening is basic urban planning catching up with reality. Our population has grown, but we’ve kept pretending everyone can live in low-density suburbs forever. That’s how you end up with insane urban sprawl, hour-long commutes, and infrastructure stretched over massive distances — which is far harder and more expensive to service than denser housing done properly.
And the infrastructure point? That’s not caused by apartments — it’s caused by governments failing to plan and invest ahead of growth. Sprawling suburbs without enough schools, hospitals, or transport have been a problem for decades. Blaming apartments is like blaming the car for a bad road.
Also, higher density is exactly what makes infrastructure viable. You can’t run efficient public transport, justify major hospitals, or build quality schools if everyone is spread out thinly. Density is what makes those services work — not the other way around.
What people are really saying here is: “don’t build near me.” But if you block development everywhere, prices go up everywhere. You can’t have affordable housing, short commutes, and low density all at once — pick two.
Australia doesn’t get worse because we build apartments. It gets worse when we refuse to build anything and lock the next generation out.
Call me daft, but aren’t we after an increase in the supply of housing to enable first home ownership?
Your principal residence is CGT exempt, so the 70% discount only helps those accumulating rental properties.
The only way the 70% discount “…will create a new supply of buyers…” is if the 70% discount only applies to a person’s first property purchase as a rentvestor.
Letting all and sundry get a 70% discount just maintains the current skew towards capitalised property purchasers who will be able to negative gear 100% into a new townhouse by (a) refinancing equity gains on existing property for their deposit, and (b) securing a new loan for the purchase price balance to the new apartment.
Here’s a thought, what about only giving the 50 – 70% discount to investors who sell to a first home buyer?