Macquarie sees budget tax changes as headwind for Australian banks

Investing.com -- Macquarie analysts said in a Friday note that upcoming Federal budget changes to capital gains tax and negative gearing for investment property could negatively impact Australian banks, which the firm considers relatively expensive.

The firm expects the slowdown in home prices to continue as tax changes add to Reserve Bank of Australia rate hikes. Macquarie maintains Underperform ratings on Commonwealth Bank of Australia (ASX:CBA), Westpac Banking Corporation (ASX:WBC), Bendigo and Adelaide Bank (ASX:BEN), and Bank of Queensland (ASX:BOQ).

Possible changes outlined by Macquarie include reducing the Australian individuals and trusts CGT discount from 50% to 33%, 25%, or zero. If eliminated entirely, the system would likely revert to the pre-1999 approach where an asset's cost base is adjusted for inflation. Property investors may only be able to claim rental losses on a limited number of properties, possibly one or two, with new purchases potentially limited to new construction.

According to Macquarie's Economics Team, a CGT discount cut could reduce house prices by 1% to 2%. Limits to negative gearing would add to this impact. House price growth has already slowed since late 2025 due to RBA rate hikes, and the firm expects this trend to continue with additional hikes and tax changes.

Macquarie said the direct impact of CGT changes for equities is relatively small compared to the indirect impact through property prices. The firm noted that the $4.5 trillion domestic superannuation industry is a major participant in Australian equities, and it does not expect their 33% CGT discount to change.

The analysts said CGT changes likely improve the relative attraction of income. They identified Atlas Arteria (ASX:ALX), Downer EDI (ASX:DBI), APA Group (ASX:APA), AGL Energy (ASX:AGL), Telstra (ASX:TLS), and Coles Group (ASX:COL) as defensive stocks with FY27 gross yields above 5%.

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