The government is considering cutting tax breaks for property investors, but this may not lower house prices by much. Economists and experts say reducing the capital gains tax (CGT) discount and ending negative gearing could raise home ownership rates by three percentage points. The current CGT discount lets investors keep 50% off their capital gains tax, which benefits mainly wealthy Australians. Nearly 90% of the CGT discount benefit goes to the richest fifth of households, with the top 1% earning above $362,900 getting almost 60% of the benefit. Brendan Coates from the Grattan Institute says scaling back this discount would make the tax system fairer. Many economists agree that the 50% CGT discount is too generous and should be reduced or removed. Research shows that cutting property tax breaks may only reduce home prices by 1% to 4%, a modest change compared to last year's 10% price rise. However, experts point out that making investing less attractive could help renters compete better with investors and raise home ownership. Hugh Hartigan, former head of research at Housing Australia, notes that such changes would shift the market's composition—fewer investors and more owners—rather than lower demand overall. The savings from halving the CGT discount could be large. Coates estimates $6.5 billion saved in the current financial year if the cut is applied broadly. This money could fund more social housing, increase rent assistance, cut income taxes, or reduce government debt, improving fairness across generations. Yet, some warn changes should not apply retroactively to protect past investment decisions. If so, tax savings could fall to about $1 billion over five years. Despite debate, most agree reforming the CGT discount would move policy in the right direction, tackling inequities in the housing system and government budget. "The main case for this reform is that it helps fix the budget bottom line and reduces the inequity of the budget," says Coates.