CANBERRA, June 15 -- For Australians in their early thirties who have watched a home deposit drift further out of reach with every weekend auction, the most consequential argument in Canberra this week is not addressed to them by name. It is, all the same, about the rest of their lives. At stake is a tax concession that has quietly shaped who buys property in this country, and who only ever rents it.

The concession is the 50 per cent capital gains tax discount, the rule that halves the tax an investor pays on the profit from selling an asset held longer than a year. Labor wants to scrap it for most assets bought from July 2027, replacing it with an inflation adjustment and a minimum tax rate of 30 per cent on the gain. The government say...