List of findings

Finding 1

5.1The committee has consistently heard that the current design of the capital gains tax discount results in a degree of concessional treatment relative to labour income which can distort decision making and incentivise tax planning.

Finding 2

5.2The design of the capital gains tax discount has the potential to distort the allocation of investment across the economy, with evidence that existing housing stock makes up a substantial share of capital gains that benefit from the capital gains tax discount.

Finding 3

5.3While there are a number of factors that influence housing markets, there is evidence that the concessions provided by the capital gains tax discount, in combination with negative gearing, have skewed the ownership of housing away from owner-occupiers and towards investors.

Finding 4

5.4The benefits of the capital gains tax discount are also unequally distributed, with implications for income and wealth inequality and intergenerational inequality.