The Albanese government will move to curb negative gearing as part of a sweeping tax overhaul to be unveiled in the federal budget next week. 

Under the proposed changes, investors who already own properties will retain their current negative gearing arrangements. 

Those who buy newly-constructed homes after the reforms take effect will still be able to deduct rental losses against other income.

The government's aim is to redirect investor demand toward boosting housing supply, instead of inflating prices for existing homes. 

The precise design of the changes is still unknown. 

The Australian Financial Review reports that one option under consideration would phase out negative gearing for investors with multiple properties, while maintaining concessions at least in part, for smaller landlords.

Alongside negative gearing, the government plans to overhaul capital gains tax. 

The budget is expected to abolish the 50 per cent capital gains tax discount for assets held longer than 12 months and replace it with the pre‑1999 system, under which real gains are taxed after adjusting for inflation over the life of the investment. 

The change would apply across all asset classes. 

New builds would once again receive preferential treatment. 

Investors in newly constructed properties are expected to be given a choice between retaining the existing 50 per cent discount or opting into the inflation‑indexed model, a move aimed at further incentivising construction.

Existing investments would be partially preserved under current rules. 

Capital gains accrued before the reforms begin would continue to receive the 50 per cent discount, while gains earned afterwards would be taxed under the new system. 

Treasury plans to apportion gains over time to avoid triggering mass asset revaluations. 

The tax package will also include a crackdown on trusts. 

Labor is also expected to introduce a minimum 30 per cent tax rate on trust distributions, aimed at income‑splitting arrangements used by high‑income earners. 

Farmers and standard estate‑planning structures are likely to be excluded. 

The government is also considering a one‑off earned income tax offset of up to $300 for workers, funded in part by the tougher treatment of trusts and investors. 

First reported by The Australian, the offset will only apply only to income earned through employment, excluding investment income, and would be limited to the current financial year.

Cabinet met earlier this week to finalise the package. 

Almost all of Labor's abandoned 2019 tax platform is set to return, with one major exception - changes to franking credit refunds on shareholdings, a policy widely blamed within the party for its shock election defeat that year.

The Coalition has since accused Labor of breaking pre‑election promises.

'Before the last election, the Prime Minister was very clear that there was going to be no new increased taxes on property, on trusts, on negative gearing,' Shadow Treasurer Tim Wilson told the Today Show on Tuesday.

'They're clearly laying the groundwork not just for these changes, but potentially going after the family home later. They say that this is going to help young Australians get into a home. We know full well that this is dishonest.'

The federal budget is being handed down next Tuesday.