Australian Treasurer Jim Chalmers promises to fix ‘widow’s tax’ on investment properties

Treasurer Jim Chalmers announced that the government will amend legislation to address the so‑called “widow’s tax” affecting jointly owned investment properties. The tax can remove capital‑gains concessions when one owner dies or a couple divorces, and Chalmers said the fix will be detailed in upcoming legislation before the broader tax changes take effect.

Existing investment properties are exempt from the recent reforms to negative gearing and capital‑gains‑tax discounts, but concerns remain that the grandfathering arrangement could be lost, leading to less favourable tax treatment. Shadow treasurer Tim Wilson criticised the government’s handling, accusing it of back‑tracking on the policy.

The announcement comes as auction clearance rates have fallen below 50 % for a second consecutive week, highlighting pressure on the housing market. Labor acknowledges that the tax reforms are influencing property values but points to interest‑rate hikes and other economic factors. NSW Premier Chris Minns urged that tax changes should support broader economic prosperity, while Chalmers defended the reforms, noting that many predictions about their impact have proved wrong.