CPA Australia has urged the federal government to avoid isolated changes to the capital gains tax (CGT) discount or negative gearing.
The accounting body cautioned that adjustments made in isolation could unsettle investment decisions, the housing market and business confidence.
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CPA Australia tax lead Jenny Wong said housing affordability is a significant national concern but stressed that relying on tax changes alone will not resolve the issue.
Wong pointed to the Treasury’s position during Senate Estimates that the main issue in the housing market is that Australia is not building enough homes.
“Changes to tax settings should go hand‑in‑hand with practical measures to lift housing supply, boost construction capacity and speed up planning systems,” Wong added.
Wong referred to recent evidence presented before parliament that outlined how CGT and negative gearing function within a wider framework of tax provisions and incentives, rather than operating in isolation.
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By GlobalData“CGT and negative gearing are part of a bigger tax ecosystem – tweak one lever on its own and you risk pushing further pressure into the rental market or distorting investment decisions,” Wong said.
CPA Australia also highlighted that public discussion on negative gearing often centres on residential housing. However, the underlying concept of allowing loss deductions has long been embedded across the Australian tax system.
The organisation said any reconsideration of this principle would require a cautious and comprehensive approach.
The professional body stated it does not back proposals that would effectively wind back the CGT discount and negative gearing without a clearly articulated, system‑wide reform road map and suitable transitional arrangements.
CPA Australia has urged the government to engage with tax professionals, the business sector and independent experts, and to ensure any future tax reforms are well designed, balanced and aligned with Australia’s long-term economic and fiscal goals.
Recently, CPA Australia warned that Australia’s protracted productivity slump now poses a risk to economic growth, competitiveness and living standards.
