By Poppy Johnston in Canberra

Falling home ownership rates among younger Australians feature in the latest sales pitch from a federal government still fighting fires weeks after the budget release.

Levelling the playing field for first-home buyers has been a prominent selling point of Labor’s tax reform package, which includes changes to negative gearing and the capital gains tax.

“If you work hard, you should be able to get ahead but that hasn’t been the case for many Australians,” Treasurer Jim Chalmers said.

“This isn’t the fault of older Australians, it’s the fault of successive governments that have ignored the challenges in tax and housing for far too long.”

Home ownership rates among 25-34-year-olds have fallen faster than for other age groups, sinking seven percentage points in the two decades from 2001 to 2021.

The combination of the 50 per cent capital gains tax discount – brought in by the Howard coalition government in 1999 – and negative gearing have made housing an enticing investment, the government says, and at the expense of homebuyers.

Reserve Bank research has also found the proportion of Baby Boomer property investors has climbed sharply since the capital gains discount was introduced, from 12 per cent in 2000 to 28 per cent in 2023.

The share of investors younger than 30 fell from nine per cent to four per cent over the same time.

Under Labor’s changes, the 50 per cent discount will be scrapped and gains adjusted for inflation taxed instead and negative gearing phased out.

Attractive tax treatment will remain open for new home builds, however.

Opposition Leader Angus Taylor labelled the reform package “toxic” and a war on aspiration at a Liberal Party federal council meeting in Melbourne on Saturday.

Mr Taylor promised to repeal the changes if the coalition win power.

Also on the offensive have been real estate and property groups, releasing modelling on Friday claiming the impact of the tax package would be worse for rent prices and housing supply than Treasury forecasts.

Business lobbies have also been critical of the plan to axe the 50 per cent capital gains tax discount, arguing it will discourage productive investment.

Carve-outs for startups have been flagged and the government is consulting on other changes with industry groups.

The tax changes have been referred to a Senate committee for scrutiny, with the committee to report back by June 22.