The Albanese government will push ahead with sweeping tax reforms targeting investors this term of government amid drafted changes to negative gearing and capital gains tax.
Sources told Sky News the changes were expected to come into effect this term of government, rather than being delayed until after the 2028 election.
Government sources said there was no intention to announce the reforms and deferring their start date to seek a fresh electoral mandate.
This comes despite Prime Minister Anthony Albanese ruling out changes to negative gearing or capital gains ahead of the 2025 federal election.
The likely implementation of tax reform will instead occur soon after the May 12 federal budget.
Two start dates — July 1, 2026 or July 1, 2027 — appear the most probable, with a strong preference inside government to get them in as soon as possible.
Labor has examined a broad package of tax reforms ahead of the May 12 federal budget, with changes to three key tax settings under consideration.
Sky News understands the Albanese government will restrict negative gearing, slash the capital gains tax discount and eliminate family trust tax breaks.
The move comes as the national debt has been forecast to soar past $1 trillion following heavy borrowing from successive governments.
The latest indications suggest the government will move to restrict negative gearing to new properties, while grandfathering existing investments.
Existing owners would be shielded from changes but future investors would no longer be able to deduct losses on established properties, under such an arrangement.
At the same time, the government appears ready to overhaul capital gains tax, replacing the 50 per cent discount with an indexation model that taxes inflation-adjusted real gains.
It remains unclear whether the change would be fully grandfathered or applied through a partial reset, where existing assets are revalued before the new system takes effect.
Sources have also told Sky News that a tax on family trusts – used by higher-income households to minimise tax – remains under consideration.
While a final decision has not been confirmed, expectations within government circles are that such a measure will be included.
The tax reform agenda marks a significant shift from Prime Minister Anthony Albanese’s pre-election stance when he ruled out capital gains tax changes.
“The proof’s in the pudding. If we were going to make changes, then why haven’t we?” Mr Albanese told Sky News in May 2025, two days before the election.
The government did not take any of the floated tax changes to voters at the 2025 election, when it won a supermajority.
Despite those assurances, Mr Albanese has increasingly hinted at his intentions to repeal tax breaks for investors.
During the week, he linked the government’s economic agenda to concerns about intergenerational equality.
“For many young people, they feel like they haven’t got a fair crack compared with my generation,” he said.