Labor’s changes to negative gearing and capital gains tax concessions are expected to deliver more than $40 billion in additional revenue, according to previously secret Treasury modelling.
The analysis, obtained through freedom of information laws by the Herald Sun, shows the reforms are forecast to increase the government’s tax take by tens of billions of dollars over the coming decade.
The modelling estimates changes to negative gearing will raise an extra $31 billion over nine financial years.
Changes to the capital gains tax discount are expected to generate another $12 billion.
The reforms were announced by Treasurer Jim Chalmers as part of Labor’s efforts to reshape the tax system.
Under the changes, negative gearing will remain available for newly built homes but will be restricted for existing properties.
Treasury modelling estimates the policy will initially raise $1.2 billion in additional revenue in 2028-29 before increasing each year.
By 2036-37, the measure is expected to generate about $5.7 billion annually.
The government’s changes to the capital gains tax discount are also expected to increase revenue, with Treasury forecasting the measure will raise $2.7 billion a year by 2036-37.
The reforms replace the current 50 per cent capital gains tax discount with an inflation-based adjustment.
Combined, the two policies are expected to add about $43 billion to government revenue over nine years.
The modelling was not publicly released by Treasury, with the government previously only disclosing combined figures for several tax changes in the budget.
The budget grouped the impact of the property reforms together with changes affecting trusts, with the total estimated revenue gain reaching $77 billion over a decade.
Mr Chalmers previously said the property tax measures would raise more than $40 billion over 10 years, but separate figures for negative gearing and capital gains tax were not released.
The Treasurer has defended the reforms, arguing they are aimed at improving housing affordability and making the tax system fairer.
“Our tax reforms are all about helping first homebuyers into homes and helping younger Australians get ahead,” a Treasury spokesperson told the Herald Sun.
“These reforms will make the tax system fairer and more sustainable, and help fund tax cuts as well as the essential services Australians rely on.”
The reforms were controversial after Prime Minister Anthony Albanese and Mr Chalmers had previously ruled out changes to negative gearing and capital gains tax concessions before the last election.
The changes later passed through parliament with support from the Greens.
Shadow treasurer Tim Wilson criticised the reforms, accusing the government of hiding the impact of its tax measures.
“The Albanese government has laid a secret tax minefield ready to hit Australians’ hard work and savings in the years to come,” he said.
“Because they can’t manage money, they’re coming after yours,” he said.
The Treasury documents were released after a freedom of information request identified 19 costings documents relating to the reforms.
According to the Herald Sun, only one document was released, and it was partially redacted.
The remaining documents were withheld on grounds including Cabinet confidentiality and concerns that releasing them could have a “substantial adverse effect on the proper and efficient operations of an agency”.