David Pocock backs major reforms for CGT, negative gearing

Senator Pocock has expressed his support for changes to the CGT discount and negative gearing in the recently released inquiry report into the CGT discount. In the report, he made two key recommendations regarding housing.

Pocock has called for the Labor government to remove the CGT discount for all residential property assets purchased after 1 July 2026. Property assets purchased prior to this date could be grandfathered under existing CGT discount arrangements, he said.

Under his proposal, a 25 per cent CGT discount would still apply to new homes built after 1 July 2026 if they are held for longer than three years.

Pocock said the government would need to simultaneously reform trusts so that they cannot be used as a backdoor measure to reduce the effective capital gains tax rate.

He also recommended that the government remove negative gearing arrangements for an investor's second or subsequent investment property interests and disallow rental deductions for vacant properties from 1 July 2026.

Pocock acknowledged that while changes to property tax settings alone will not solve Australia's deep housing affordability challenges, they would help when enacted alongside a range of other measures.

He said while Labor had previously suffered an election loss after announcing a broad suite of reform proposals, including a CGT discount to 25 per cent, Labor had "overlearned the lessons of that election loss".

The senator noted it has since been shy to pursue meaningful reform of what many argue is an overly generous property tax concession regime.

"With a record majority in the House of Representatives and a Senate cross-bench urging them to do more on housing, now is the time for Labor to pursue that reform," he said.

"This is a reform I have been pushing for prior to being elected and throughout my first, and now during my second, term as a Senator for the ACT.

"It’s a change people in my community want to see both for the impact it will have in reducing competition for first home buyers seeking to enter the market, but also for the signal it sends about changing how we treat housing from being seen purely as an asset class and vehicle of wealth creation to a fundamental human right all Australians should be able to access."

Pocock's push for reforms to the CGT discount and negative gearing has also been supported by independent Allegra Spender, who recently called for a reduction in the CGT discount and changes to negative gearing in a white paper.

Spender wants to see the capital gains tax discount reduced from 50 per cent to 30 per cent and for negative gearing to be ring-fenced so that investment losses can only be offset against investment income, not against wages.

The Greens have also called for bold tax reform for housing in the upcoming federal budget, with senator Barbara Pocock saying that tax breaks for wealthy property investors had "cooked the housing system".

Pocock said the current housing system was "rigged for the wealthy" and designed to drive up the cost of housing.

“During the Greens-led inquiry into CGT discounts, expert after expert said wealthy property investors shouldn't get these massive handouts," she said.

“This next budget is a huge opportunity for the government to deliver bold, ambitious tax reform that puts renters and home buyers first.”