The St Vincent de Paul Society National Council of Australia is urging the Federal Government to reform the Capital Gains Tax (CGT) discount to create a fairer, more equitable tax system and help address Australia’s housing crisis.

In its submission to the Inquiry into the Operation of the Capital Gains Tax Discount earlier this year, the Society is calling for a reduction of the CGT discount from 50 percent to 25 percent over five years, applied consistently across individuals, trusts and superannuation funds. The policy is grounded in Catholic Social Teaching and the principles of human dignity and the common good.

The current 50 percent discount unfairly benefits high-income earners, fuels investor demand for existing housing stock and drives up prices, leaving renters and first-home buyers at a severe disadvantage. 
The Parliamentary Budget Office’s (PBO) latest costings (10 February) demonstrate that the distribution of benefits from the CGT discount is highly skewed towards Australia’s very highest-income taxpayers:

• the top 10 percent of income earners accrue around 82 percent of the tax savings from the CGT discount in 2025-26
• Within that group, the top 1 percent account for almost 60 percent of total tax benefits.

This exposes the myth that the 50 percent CGT discount largely benefits so-called “mum & dad” investors as misleading; it mostly benefits those with established wealth.

The PBO cites the Tax Expenditures and Insights Statement estimates foregone revenue from the CGT discount on property to be $8.9 billion in 2025-26 alone.

The Society believes these billions of dollars in tax breaks to Australia’s wealthiest could be better invested in rebuilding depleted social housing stocks and measures to reduce housing stress and homelessness, such as boosting Commonwealth Rent Assistance for low-income households.

It is anticipated the Federal Government will announce CGT reform in the May Budget.

To support the Society’s advocacy on CGT reform, contact your local federal representative and ask them to take action for a fairer Australia.

Read the Society's Submission on the CGT Discount.