Albanese Property Investment Tax Savings Lift 90% of Young Australians
albanese property investment tax savings would leave around 90% of young Australians better off under the Albanese government's tax proposals. Treasury secretary Jenny Wilkinson shared the modelling in Sydney on Thursday, after the government introduced the tax changes to parliament. The package combines a $1,000 deduction, a $250 offset and changes to capital gains tax and negative gearing.
Wilkinson’s 90% Treasury model
90% of young Australians would be better off under the reforms before housing-market effects are counted, Wilkinson said at an Australian Business Economists lunch in Sydney. She said the automatic $1,000 tax deduction, the $250 working Australians tax offset, and the capital gains tax and negative gearing changes would benefit most young people.
90% of Australians would have been better off by age 30 had the proposed changes been in place from 2000, according to the same Treasury modelling. Wilkinson said the benefits of the Wato and instant deduction outweighed the impact of the savings tax changes, putting the gains into a time frame younger workers can understand: what they would have kept by the time they reached 30.
Reserve Bank investor shift
35% of property investors were under 40 in 2000, versus about 20% by 2023, Reserve Bank research cited by Treasury showed. Over the same period, investors over 60 rose from 12% to 28%, a shift that leaves older owners holding a much larger share of the market than they did two decades earlier.
One in 10 Australians under 35 own shares, Wilkinson said, so the reforms reach a group with exposure to both wages and assets, not just housing. She also said there was no conclusive evidence that the new settings would worsen productivity, and cited OECD research saying there is not clear evidence to support favourable treatment of capital gains beyond compensating for inflation.
Trade-offs for investors
The top 10% of lifetime earners would have been worse off under the new system than the old one by the time they turned 30, because Treasury judged all Australians by total income over their lifetime. Wilkinson said that reflected the trade-offs in system-wide reform, and that applying the new arrangements across all assets mattered because limiting them to housing would create a significant new distortion in the tax system.
For investors, the message is narrower than the headline suggests: the modelling says most young Australians gain, but a smaller group of higher lifetime earners and some people with significant share market holdings would face higher tax. The practical result is a split system where the broad youth benefit sits alongside a clear cost for the top earners who would pay more under the new settings.
