February 27, 2026
Every so often, a political debate arrives that demands plain speaking over spin. The proposed changes to capital gains tax on property in Australia is one of those moments. On this episode of the Positive Property Show, hosts George Markoski and Christina Markoski discuss what is shaping up to be the most consequential tax reform for Australian property investors in over two decades.
Here is how capital gains tax currently works for Australian property investors. Hold an investment property for more than 12 months, sell it at a profit, and you only pay tax on half of that gain. That is the 50% CGT discount, and it has been in place since 1999.
The proposal on the table ahead of the May 2026 federal budget is to reduce that discount to somewhere between 25% and 33%. Treasury is reportedly modelling a reduction of the CGT discount from 50% to 33% for residential investment properties, and Treasurer Jim Chalmers has signalled willingness to act. WealthWorks
That sounds like a technicality until you run the actual numbers.
Buy a property for $500,000. Sell it for $700,000. You have made a $200,000 gain. Under the current 50% discount, you are taxed on $100,000. Reduce that discount to 25% and you are suddenly taxed on $150,000. Same house. Same gain. Same effort. Fifty percent more tax on your profit.
George’s verdict on the stated reason for the change — that it will help renters and first home buyers enter the market — is blunt. The government is not solving a housing crisis. It is executing a cash grab with a politically convenient cover story.
This is where the episode makes its most important point, and it is worth sitting with.
That single statistic dismantles the dominant political narrative around capital gains tax and property investors in Australia. The “greedy landlord” framing that justifies these reforms collapses the moment you look at the actual data. More than half of Australian property investors fall outside the top 20% of income earners, and many entered the market under existing tax rules specifically to fund their retirement. Investplusaccounting
These are not the targets the reform rhetoric describes. They are the people being asked to pay for a policy that will not solve the problem it claims to address.
While individual investors face a heavier tax burden, large foreign institutional players have been quietly expanding their footprint in the Australian residential property market. George names this directly. Companies like BlackRock operate under a fundamentally different financial structure, one that existing and proposed reforms do not meaningfully constrain.
The Monopoly analogy George uses throughout the episode is deliberately straightforward. When a single player acquires the whole board, everyone else eventually runs out of money. Concentrated institutional ownership of residential property does not create more affordable housing. It creates a different class of landlord with far greater market power and far less accountability.
Mum and dad investors currently provide rental housing the government has chronically failed to supply. Policies that price them out of the market do not fill that gap. They simply change who collects the rent and at what scale.
Negative gearing comes up in the episode, as it always does in these conversations. George’s argument is straightforward. Negative gearing is not a loophole engineered for the wealthy. It is the mechanism that keeps a substantial portion of Australia’s private rental supply funded by individual investors rather than the state. If both negative gearing and the CGT discount are wound back simultaneously, deliberately running a cash-flow-negative property purely for a discounted capital gain becomes a far less compelling strategy. Propertyprinciples
Remove the incentive and you do not conjure more affordable housing from thin air. You reduce rental supply, push prices up, and leave renters worse off than before.
George’s answer is characteristically direct: stick to the principles, and accumulate strategically. The buy-and-hold approach Positive Property has championed for over 20 years means the CGT discount, in many cases, never becomes a factor at all. Investors who do not sell do not trigger a capital gain. Instead, they refinance against equity, retain the asset, and keep compounding.
Some investors are already moving to sell before May 12 to lock in the full 50% CGT discount while it remains available — but selling is not the right move for everyone, and a rushed sale that ignores property fundamentals will cost more in the long run than any tax change. Hudsonfinancialplanning
The right approach is informed, not reactive. Understand what is being proposed. Model your own numbers. And invest in properties with strong underlying fundamentals that perform regardless of which way the political wind blows.
George Markoski has spent more than 20 years teaching Australians how to build wealth through property. The Positive Property Show exists to give everyday investors the same clarity and strategic grounding usually reserved for those with expensive advisors — especially at moments like this one, when the rules are genuinely up for debate.
For more on the proposed capital gains tax changes and how they apply to Australian property investors, the ATO’s current guidance on capital gains tax is a useful reference point.
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