Australia’s growing generational wealth divide has sparked new tax reforms targeting investment property and wealth accumulation, while younger generations continue to struggle with housing affordability.
According to the Albanese government the measures are designed to make the tax system fairer and improve access to housing for younger Australians.
From July 2027, negative gearing concessions for existing residential properties will be restricted, while changes to capital gains tax and discretionary trusts are also planned.
The reforms come as rising property prices and debt levels continue to shape the financial outlook of younger generations.
University of Wollongong student, Toby Kay, 23, said entering the housing market feels increasingly unrealistic without family support.
“You can work full-time and still fall behind house prices,” Mr Kay said.
“A lot of people our age feel like home ownership depends on whether your parents already own property or not.”
Recent analysis from KPMG Australia found Baby Boomer households remain Australia’s wealthiest generation, with average net worth sitting at approximately $2.4 million. Gen X households followed at around $2.2 million, while Millennial households averaged approximately $905,000.
KPMG also found Gen X now holds the largest amount of property wealth, averaging approximately $1.455 million in dwellings and land, compared with $1.36 million for Baby Boomers and roughly $890,000 for Millennials.
At the same time, younger Australians continue to hold significantly higher debt burdens. Millennials carry average loans of approximately $460,000 compared with $425,000 for Gen X and $160,000 for Baby Boomers.
However, critics argue the reforms do little to address the structural causes of housing inequality.
An analysis by Australian Financial Review (AFR) questioned whether the budget’s tax reforms would substantially improve affordability for younger Australians, arguing the measures focus more on taxing accumulated wealth than solving housing supply shortages or rising living costs.
AFR political editor Phillip Coorey told the AFR that the reforms targeted the “preferential treatment that assets get” rather than income tax itself.
“Rather than lower income tax rates down to the preferential treatment that assets get, they’re lifting the tax treatment of assets back up to the rates that income is taxed at,” Mr Coorey said.
“So rather than lift all boats, they’re sinking all the yachts.”
The criticism reflects broader concerns that while the reforms may reduce advantages for wealthier investors, they may not significantly improve housing accessibility for younger Australians facing rising rents, HECS debt and increasingly unaffordable property prices.
