Labor’s new minimum 30% capital gains tax rate means a young higher-income professional making strong returns on shares or cryptocurrencies could see their CGT bill effectively double. Under current settings many part-time students pay no income tax at all, but modelling from The Australian indicates they could soon face tax bills running into the thousands. Advisers warn the policy disproportionately impacts Gen Z and millennial higher-income earners who are building wealth through growth assets.
Investor advocates say the change tilts the playing field against younger Australians who rely more heavily on capital gains to catch up. Older generations, particularly those who built portfolios under the existing CGT discount rules, keep most of their accumulated gains taxed under the old, more generous framework. That leaves young adults facing higher tax on future gains from the same types of investments. Some critics frame it as a timing penalty on latecomers to the market rather than on the underlying assets themselves.
Policy specialists argue the outcome is especially jarring because Labor positioned the changes as helping younger Australians into wealth-building. Large cohorts of Baby Boomer investors already hold substantial assets that have benefited from decades of favourable CGT settings. Younger investors, who are only now starting to accumulate growth assets, are more exposed to the steeper minimum rate across a much larger share of their lifetime gains.
