The Australian Labor government under Anthony Albanese is exploring the possibility of reforming negative gearing after a recent report indicated that the Treasury is considering options to limit this tax deduction. Negative gearing has been a contentious issue in Australia, especially in the context of rising housing costs, and while Albanese previously dismissed changes during the elections, the party is now open to discussing alternatives to support young Australians facing housing challenges.

According to a government source, there is potential to analyze negative gearing alongside capital gains tax modifications. The suggestion of aligning these tax changes is gaining traction, as it could be presented in an upcoming federal budget aimed at addressing generational inequality in housing access. While discussions on these tax reforms are ongoing, no immediate decisions are expected, reflecting the cautious approach of the government on such a sensitive economic issue.

Labor frontbencher Mark Butler emphasized that the party is actively contemplating various options for policy modification, aiming to create a fairer environment for young Australians. The implications of these potential changes could be significant, affecting investment strategies in property markets and altering the housing landscape in Australia, highlighting the broader challenge of ensuring affordable housing for future generations.