FAAA backs CGT discount regime retention

Mike Taylor

Managing Editor/Publisher, Financial Newswire

19 January 2026

The Government should not be considering changes to the Capital Gains Tax (CGT) settings in the context of housing affordability without taking a broader view including the impacts of negative gearing, immigration and the social security settings, according to the Financial Advice Association of Australia (FAAA).

At the same time as acknowledging a divergence of views amongst financial adviser members on whether the CGT discount should be changed in relation to housing assets, the FAAA said members generally agreed that making changes to the CGT discount alone is unlikely to have a material effect on housing, housing assets and housing inequality.

In an submission filed with the Senate Select Committee on CGT Discount, the FAAA said its members agreed that changes to the CGT discounts aimed at addressing housing affordability, “should only be made as part of a broader review of the policy settings and issues generally that have led to issues of availability and affordability in the housing market”.

“It is the view of the FAAA that the CGT discount is just one factor amongst a range of factors that influence the types of assets purchased by investors,” the FAAA said. “This is a complex issue, as it needs to be considered in the context of investments by corporations, super funds, trusts and individuals.”

“The application of the discount varies across each of these different types of investors. The choice of assets is also likely to be influenced by the vehicle of investment and by access to financial advice.”

The submission said the FAAA supports the application of the CGT discount for trusts, including with respect to superannuation.

“With superannuation being such an important vehicle for Australians to invest for their retirement, retention of the discount, even in the context of the different taxation arrangements that apply to superannuation, is important,” it said.

“We believe that the CGT discount is continuing to have a positive impact with respect to its intended purpose of promoting investment in productive assets. The FAAA believes that the CGT discount has an important role to play in Australia’s future tax mix.”

The FAAA recommends that any changes to the existing CGT discount aimed at addressing housing affordability be considered as part of a broader review of the issues affecting housing, housing assets and housing inequality. Issues that may be considered in a broader review of housing inequality include:

• Application of capital gains tax to housing assets.
• Negative gearing.
• Individual borrowing capacity.
• Immigration impact on demand for housing.
• The Social Security settings and their housing market impact.
• Incentives that impact on the reported empty bedroom surplus, leading to more efficient use of existing housing assets.
• The supply of new housing.
• Programs to promote first home purchases.