Capital gains tax and negative gearing policies disproportionately benefit the wealthiest Australians, with more than half of the capital gains tax concession flowing to the top 1% of income earners, according to the latest federal budget data.
Key Findings from the Budget
The 2026 federal budget includes changes to negative gearing, capital gains tax (CGT) concessions, and discretionary trust tax breaks—policies critics say fuel housing speculation and exacerbate inequality. The top 1% of lifetime earners receive over $700,000 in tax concessions from these policies over their working lives.
In 2022-23, the most recent year with available data, the top 10% of income earners captured 83% of the CGT concession benefit and 37% of negative gearing benefits. The vast majority of both benefits went to those earning above the median income of $58,216.
How Capital Gains Tax and Negative Gearing Work
Capital gains tax is paid on profits from selling assets like property. Since 1999, investors receive a 50% discount on CGT if they hold an asset for more than 12 months.
Negative gearing, or rental loss, occurs when an investment property generates a loss—for example, when rental income fails to cover mortgage costs. These losses can be deducted from a landlord's taxable income.
Inequality Among Tax Filers
Of the more than 1 million tax filers who reported a net capital gain in 2022-23, only 71% actually benefited from the CGT discount. Nearly all of this benefit—95%—went to Australians earning above the median income. However, even among higher earners, the distribution is highly skewed: more than half of the CGT benefit went to the top 1% of income earners.
This article was amended on 13 May 2026 to clarify that more than 1 million tax filers saw a net capital gain in 2022-23.
