Federal parliament is continuing to debate looming tax changes that would limit negative gearing to new properties from July 2027, as well as axe a 50 per cent discount on capital gains tax to a rate tied to inflation.
The government has said the changes would help to get 75,000 more people into their first home within a decade.
Anthony Albanese said the measures were necessary, despite resistance from the coalition and business groups, because previous approaches to increasing home ownership were not enough by themselves.
"We know also that we needed to do more. We need to do more, because in spite of all of those programs we still were not doing enough," he told parliament on Wednesday.
"Too many young people will tell the story of turning up to an auction on a Saturday and simply being outbid by someone who has a partner at that auction, an investor, and the partner is every Australian taxpayer.
"If they're in a bidding war at an auction, the investor knows that if they go for $20,000 more then that's running off their tax, if they're going to negatively gear that property, something that's not available to the first home buyer."
Parliament is set to sit into the night to debate the changes, ahead of a vote in the lower house on Thursday.
While the laws will have passage through the House of Representatives, the future of the legislation remains unclear due to the coalition promising to vote against it and the Greens yet to signal whether they will back the measures.
A short Senate inquiry will be held later in June on the tax measures before it gets sent to the upper house for debate.
Independent MP Allegra Spender said the changes were being raced through parliament too quickly.
"It should not be rushed through like this. The government can't say on the one side that this is some of the most significant tax reform in 25 years and then push it through the parliament as it is doing at the moment," she told Sky News.
"Pause, take a breath, look at the model they've chosen, and take a look at other models."
Treasurer Jim Chalmers sought to allay fears the measures would cause further impact to the budget bottom line.
"The Treasury's forecasts in the budget are for the economy to continue to grow, obviously subject to developments, particularly in the Middle East," he told reporters in Canberra.
