Australian Treasurer Jim Chalmers takes questions from the media in Canberra, Australia at Parliament House on May 13, 2026. Hilary Wardhaugh/Getty Images
Treasurer Jim Chalmers has promised to fix laws imposing a so-called “widow’s tax” on investment properties with details yet to come.
The issue, which relates to investors with jointly owned properties potentially losing out on concessions if one owner dies or a couple divorces, would be addressed in future legislation before the changes take effect, Chalmers said.
Asked multiple times on Sunday how the government would deal with the loophole, highlighted before the passage of Labor’s controversial tax changes on Thursday, the treasurer said he intended to address that issue.
“We will fix it, and we’ll make clear the way that we will fix it in the legislation that follows,” he told the ABC’s Insiders program.
Existing investments are exempt from the federal government’s changes to negative gearing and capital gains tax discounts, but there are concerns about how the rules will apply if property ownership changes.
If a couple divorced or one partner died, the grandfathering arrangement could be removed, leading to less favourable tax treatment.
Chalmers’ comments amounted to a “clean-up job,” said Shadow Treasurer Tim Wilson in a statement.
“At Thursday breakfast, ministers were defending the ‘widow’s tax,’ but by lunchtime the government backtracked, and by Sunday morning coffee they’re hedging to betray Australians again,” he said.
Preliminary auction clearance rates were below 50 percent for a second straight week, according to data from property research firm Cotality.
The weak result points to falling national housing prices as the dominant Sydney and Melbourne markets shift further into reverse.
Labor concedes its investment changes are impacting the property market but says recent interest rate rises and broader economic factors play more significant roles.
New South Wales (NSW) Premier Chris Minns said all governments should have an eye to growing Australia’s economic prosperity with tax changes, rather than simply trying to raise more revenue.
Asked whether he thought the capital gains tax overhaul, which impacts all forms of investment, would prevent businesses from attracting capital, Minns offered a blunt response.
“I hope not,” the Labor leader told Sky News.
“There are a lot of entrepreneurs, particularly in western Sydney, who would love to start their own business.
“We just need to make sure we’ve got the conditions to do that.”
But Chalmers defended the wholesale tax changes, saying any such policy shift was always hotly contested.
“There are all kinds of predictions that the sky will fall in and all other kinds of predictions which turn out to be wrong,” he said.
“We expect that to be the case again.”
By Zac de Silva in Canberra.
