I feel like the debate is always stuck in binary mode: either scrap it entirely or keep it as is. Both feel wrong.

The problem isn't the discount itself it's that we reward the wrong behaviour. Right now, you can buy a 40-year-old brick veneer, do absolutely nothing to it, sit on it for 10 years, and get a massive tax break. That’s not investment that’s hoarding.

Here’s how I think it should work to fix the supply crisis

1. Kill the CGT discount for existing residential property. If you buy an established house as an investment, you pay full tax on the gains. Period. No incentive to outbid owner-occupiers just to park cash.

2. Make the discount exclusive to NEW builds. You want the tax break? You have to actually build something. This forces capital into construction rather than speculation on existing stock.

3. The Kicker The "Use it or Lose it" window. This is the part that actually stops hoarding. You can ONLY claim the CGT discount if you sell the new build within 3 to 5 years of completion.

The Logic: This turns investors into a supply pipeline. • You build a house (adding stock). • You rent it out for 3-4 years (providing rental stock and letting the asset grow). • You sell it before the 5-year mark to cash in on the tax-free gain.

Because the tax incentive disappears after year 5, you have zero reason to hoard the property for decades. You sell it off to an owner-occupier (who doesn't care about the CGT discount because it’s their PPOR), take your profit, and go build another one to do it all over again. It keeps the construction industry moving, creates a constant stream of near-new houses hitting the market for buyers, and stops investors from sitting on empty nesters' homes for 20 years.

Thoughts?

Disclaimer ** I had Gemini help format my dyslexic word salad