To the Honourable the Speaker and Members of the House of Representatives and the Honourable the President and Members of the Senate in Parliament assembled:

This petition is submitted by the Australian Proprietors Alliance (APA) and the undersigned citizens and permanent residents of Australia.

We draw the attention of the Parliament to our serious concerns regarding the proposed property and investment tax reforms announced in the 2026–27 Federal Budget. While presented as measures to address intergenerational inequality and housing affordability, these reforms risk producing significant unintended consequences for Australia’s housing market, investment environment, small business sector, and long-term economic productivity.

In particular, we are concerned that the proposed changes to negative gearing, capital gains tax (CGT), and discretionary trust taxation will undermine investor confidence, reduce housing supply, and place disproportionate burdens on small business owners, property investors, and family enterprises.

Rather than improving affordability or fairness, these measures risk discouraging investment, reducing rental availability, and weakening the financial foundations of ordinary Australians who rely on property and small business structures for long-term security and retirement planning.

Key Grounds for Opposition

We respectfully request that Parliament consider the following concerns:

1. Impact of Proposed Trust Taxation Changes

The proposed reforms to discretionary trust taxation, including the introduction of a 30% minimum tax rate on trust income, may adversely affect hundreds of thousands of Australian families, small businesses, and farming enterprises that lawfully use trust structures for asset protection, succession planning, and operational flexibility.

These changes may:

• Increase tax burdens on family-owned businesses and small enterprises
• Reduce reinvestment capacity and job creation potential
• Create uncertainty for long-standing and compliant investment structures

In particular, the proposed minimum tax rate risks discouraging small-scale property developers and builders who rely on trust structures to manage risk and fund incremental housing projects. This may directly conflict with broader policy objectives aimed at increasing housing supply.

2. Restriction of Negative Gearing on Established Properties

The proposal to limit negative gearing to newly constructed residential properties from 1 July 2027 risks reducing investment in established housing stock, which forms the majority of Australia’s rental market.

Potential consequences include:

• Reduced investor participation in the established housing market
• Declining rental supply and reduced housing availability
• Increased upward pressure on rental prices
• Lower liquidity in the secondary property market

Private investors play a critical role in maintaining and supplying rental housing. A narrowing of investment incentives may unintentionally reduce overall housing availability and affordability.

3. Changes to Capital Gains Tax (CGT) Discount

The proposed replacement of the 50% CGT discount with cost-base indexation, combined with a 30% minimum effective tax rate on capital gains, removes a key and long-standing incentive for long-term investment.

Concerns include:

• Reduced predictability and stability in the tax system
• Retrospective impacts on long-held investment assets
• Reduced incentives for long-term wealth creation and retirement planning
• Disproportionate impact on “mum and dad” investors

In addition, the removal or dilution of established CGT concessions may undermine intergenerational wealth transfer and discourage productive long-term capital allocation.

 4. Economic and Behavioural Impacts of the Indexation Model

The proposed indexation approach introduces structural issues that may negatively affect market behaviour:

• Grandfathering inequality: Different treatment between existing and future investors creates intergenerational inequity and reduces confidence in policy stability.
• Lock-in effect: Investors may hold assets longer than economically efficient to avoid adverse tax outcomes, reducing market liquidity and capital mobility.
• Risk distortion: The system may unintentionally penalise investors who take early or higher risks, discouraging innovation and development activity.
   

Principal Request / Action Required

We therefore respectfully request that the Parliament:

1. Retain the existing negative gearing framework for all residential property, recognising the essential role of private investment in supporting Australia’s rental housing supply.
2. Maintain the current 50% Capital Gains Tax discount, ensuring certainty, fairness, and stability for long-term investors and retirees.
3. Abandon or substantially revise the proposed 30% minimum tax on discretionary trusts, preserving the ability of small businesses, family enterprises, and property developers to operate effectively and sustainably.
    

Closing Statement

The proposed 2026–27 tax reforms risk weakening investment confidence, reducing housing supply, and placing disproportionate pressure on family businesses and individual property owners.

We urge Parliament to ensure that any tax reform maintains stability, encourages productive investment, and supports—not undermines—the role of private enterprise in addressing Australia’s housing and economic challenges.

 We respectfully call on Parliament to reject or substantially amend these proposed tax overhauls.

 Sign the Petition

By signing this petition, you join the Australian Proprietors Alliance (APA) in calling for a fair, stable, and predictable tax environment that supports Australian property owners, small businesses, and long-term investment in housing and productive assets.