The federal government's case for its negative gearing and capital gains tax overhaul rests on one striking number: around 75,000 additional owner-occupiers over the next decade. That is Treasury's estimate, published alongside the 2026–27 Budget. With the changes now law and the key start date of 1 July 2027 less than a year away, it is worth looking closely at what the modelling does and does not say.

The short version: Treasury expects modest effects on prices and rents, and a meaningful but gradual lift in home ownership. Critics argue the supply side of the story is less rosy.

The reforms behind the numbers

The modelling covers two changes enacted in the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which received Royal Assent on 26 June 2026.

First, from 1 July 2027, net rental losses on established residential dwellings bought after 7:30pm AEST on 12 May 2026 can only be offset against residential property income and gains, not wages. Properties held on Budget night, and new builds, keep the old treatment.

Second, from 1 July 2027 the 50 per cent CGT discount for individuals, trusts and partnerships is replaced by cost-base indexation plus a 30 per cent minimum tax rate on capital gains. The ATO notes the changes apply only to gains that accrue after that date.

What '75,000 more home owners' actually means

The Budget explainer puts the headline effect at "around 75,000 additional owner-occupiers over the next decade". Treasury describes this as "equivalent to reversing around 10 years of declines in the home ownership rate".

The mechanism is straightforward in principle. If the tax treatment of established investment properties becomes less generous, some investors may bid less aggressively for existing homes. That can leave more of those homes to be bought by people who intend to live in them, including first home buyers who have often competed directly with investors at auctions.

The figure is a projection, not a guarantee. It depends on how investors and first home buyers respond over many years, and on housing market conditions that no model can fully anticipate.

It also needs context. The same explainer notes that home ownership among 25 to 34-year-olds fell 7 percentage points between 2001 and 2021, and that housing prices have risen more than twice as fast as average full-time earnings.

In other words, the modelled gain would claw back part of a long decline rather than reverse two decades of lost ground.

Prices and rents: small moves by design

On prices, Treasury expects values to "grow by around 2 per cent less over a couple years". This is slower growth, not a forecast of falling prices.

To give a sense of scale, 2 per cent of a hypothetical $800,000 home is $16,000. For a first home buyer saving a deposit, that may help at the margin, although the actual effect will vary widely by city and property type.

On rents, Treasury estimates an increase of "less than $2 per week". Even at the full $2, that is under $104 a year for a tenant, a hypothetical upper bound based on the modelled figure.

These modest estimates matter politically. One of the main arguments against changing negative gearing has long been that investors would pass higher costs on to renters. Treasury's modelling suggests that effect would be small.

Who carries the change

The modelling also sheds light on how many people are directly affected. According to the Budget explainer, around 1 per cent of taxfilers, about 230,000 people in 2022–23, acquire negatively geared properties each year.

About 7 per cent of taxfilers, around 1.1 million people in 2022–23, report a net capital gain. Not all of those gains relate to property; shares, crypto and other assets are also caught by the new CGT settings.

On revenue, the negative gearing and CGT reforms are estimated to increase receipts by $3.6 billion over the five years from 2025–26, according to the Budget Paper No. 2 figure quoted by King & Wood Mallesons.

Companies and super funds are outside the CGT changes, and grandfathering means most existing investors see no change to their negative gearing treatment.

The pushback on supply

Not everyone accepts the government's framing. The Property Council of Australia says the changes will cut housing supply by 35,000 homes. That figure has been attributed to government analysis in some coverage, but it does not appear in the Budget explainer.

The new-build exemption is the government's main answer to supply concerns. Investors in genuinely new dwellings can still deduct losses against other income, and draft rules released in August would treat a property as new if acquired within 24 months of a certificate of occupancy.

What to watch next

The modelled home ownership gains depend on the rules working as intended, so the details still being settled matter.

The next tranche of legislation, the draft Tax Reform No. 3 Bill covering the new-build definition and exemptions for build-to-rent and social housing, is yet to be introduced to Parliament.

The negative gearing quarantine and the new CGT regime both begin on 1 July 2027. Established properties bought after Budget night can still be negatively geared until 30 June 2027, but not from that date. Home ownership data from future Census and ABS releases will give the first independent test of whether Treasury's projection holds.

Anyone weighing a property decision in light of the modelling may benefit from speaking to a registered tax agent or licensed adviser about their own circumstances.