Labor has a rare chance to tackle the housing crisis

Labor holds a large parliamentary majority and is reportedly weighing changes to the 50% capital gains tax discount ahead of the 12 May budget; defence land sales and a Greens-led inquiry are adding pressure to address housing issues.

Labor is reportedly considering changes to the 50% capital gains tax discount ahead of the 12 May budget. The Defence Department has announced plans to sell more than 60 properties, raising questions about future use for housing. The government holds a substantial majority in parliament, and the Greens plan an inquiry into CGT settings. The treasurer has said the government is open to major tax reform. Key points: - The Defence sale includes barracks, airfields and other sites, and one Melbourne site is reported to have scope for thousands of homes after remediation. - Labor is reported to be contemplating scaling back the long-standing 50% capital gains tax discount, which applies to assets held more than 12 months. - Parliamentary Budget Office figures cited in reporting estimate the CGT discount will cost about $250 billion over the next decade. - The Greens plan a parliamentary inquiry and the Grattan Institute has recommended halving the discount; the treasurer has signalled tax reform discussions ahead of the budget. Summary: Changes to the CGT discount and related tax settings could alter incentives for property investors and influence how housing demand is distributed. The next formal steps include a Greens-led parliamentary inquiry and the government's 12 May budget, where any specific proposals would be set out.