Family home CGT exemption won't last to 2066, Phil Tarrant predicts

The capital gains tax exemption on the family home will not survive the next four decades, Property Buzz host Phil Tarrant has predicted, pointing to the demographic pressures set out in the 2026 intergenerational report.

"By 2066, the principal place of residence will not be exempt from capital gains tax," Tarrant said on the Property Buzz podcast, speaking with Momentum Media director Alex Whitlock. "They're going to have to tax it, I'm afraid."

Whitlock agreed, saying "it's all that's left".

Tarrant said the report, which projects what Australia will look like 40 years from now, pointed to a sharply older population, a structural housing supply deficit and a tripling of the cohort aged 85 and over. He said the number of Australians over the age pension age would nearly double to 9 million by 2066.

The consequence, in his reading, is a heavier tax burden on people still in the workforce, and a search for new bases to tax accumulated wealth.

"What's going to have to happen is that the punters in the workplace are going to be taxed more," he said. "I suspect, though, what it's also going to say is they're going to find ways to tax the wealthy people that have accumulated wealth."

Whitlock said taxation was becoming "a very complicated balancing act moving forward".

Superannuation and the retirement equation

Tarrant said the report leaned on the idea that Australians would become less reliant on the age pension as superannuation balances grew, but noted that super typically does not last long into retirement in the traditional sense.

Whitlock questioned the logic of that position given changes to super settings. "If that's what they honestly think, then why on earth are they crippling superannuation through making it less flexible for the way that people choose to invest their money?" he said.

Tarrant said the report identified property as central to the retirement picture, with outright home ownership remaining the single strongest predictor of whether an individual enjoys financial security in retirement.

Rethinking the great Australian dream

Despite that, Tarrant argued the political messaging around home ownership needed to change, saying the post-war narrative of the quarter-acre block and picket fence may no longer fit the country's circumstances.

"That might not be the narrative which is suitable for Australia today, because all you're doing is setting up Australians to fail if they can't do it," he said.

He said the priority should be a roof over every head, with ownership a secondary question, and that younger Australians needed practical information rather than slogans.

"Help people understand from an earlier age what they need to do to succeed in property, whether that's making wealth through investment property, whether it's securing your own foot on the ladder, or be comfortable with understanding what renting involves," he said.

Tarrant added that buyers should "not think that crashing house prices in the suburb where I live is the way to do it", and instead focus on identifying an entry-level asset they can build from.

Renting for life and institutional landlords

The report also flagged rental market strain and institutional reform, with a growing share of Australians expected to rent long term or for life.

Tarrant linked that to the build to rent sector and the role of super funds, describing a future of "institutionalised money institutionalising Australians in institutionalised housing stock".

He said the report also called for a shift away from greenfield detached housing towards townhouses, apartments and missing middle dual occupancy stock.

Tarrant said governments should stop selling a utopian vision of the future. "If government's selling this notion that there's going to be this utopian future, you've got so many challenges to the world moving forward," he said, citing the pace of AI, demographic change and ageing populations. "It's going to get tougher, not easier."

Listen to the full episode: The Property Dream is Rapidly Changing