Existing property investors look set to avoid paying more tax under Labor’s mooted changes to CGT in next month’s budget, after Jim Chalmers said he wanted to “make sure that we recognise the decisions that people have taken in the past” and flagged any reforms would not generate “a huge amount of revenue”.

The treasurer is widely expected to modify the flat 50% tax discount on profits from the sale of assets held for more than one year, potentially returning to the pre-1999 model where capital gains are adjusted for inflation.

With negative gearing rules also in the government’s sights, investors and some experts have called for any changes to tax rules to only apply to new investments.

Chalmers said the government was mindful of “transitional issues” around tax changes.

“Without getting into hypotheticals about policies, what you try and do is to make sure that we recognise the decisions that people have taken in the past,” he told the CommBank View podcast.

In response to a question about changes to CGT, Chalmers said “one of the things that I think is not well understood in the speculation is that – even if we went down the path that has been speculated about in those areas that you’ve asked me about – people shouldn’t expect there to be this huge amount of new revenue show up over the course of the next few years in the budget”.

The Grattan Institute has calculated that halving the capital gains tax discount and phasing it in over five years to include all investments would generate $6.5bn a year for the budget.

A policy package of returning to the pre-1999 inflation-adjusted capital gains tax regime and scrapping negative gearing, with the changes fully grandfathered – or not made retrospectively - would generate about $2bn in extra revenue in the first four years, according to recent estimates by CBA.

The benefit to the budget bottom line over the first decade was $25-30bn – although whether investors end up paying more or less capital gains tax than under the flat 50% discount would depend on economic conditions, the bank said.

The treasurer also signalled that scaling back tax breaks for landlords would not necessarily make homes cheaper but could rebalance the “composition” of home ownership away from investors and towards owner-occupiers.

“We’re not trying to target a certain change necessarily in price,” he said.

“I think anyone who looks objectively at the way that home ownership rates have declined over time and proportionately as well, homeowners and owner occupiers versus investors, there’s been a long-term trend.

“I think that even if you just go back to around the turn of the century, those changes that were made to capital gains [to the current regime in 1999], you can see that that’s had an impact in the composition of the housing market.

“We’ve made it really clear for some time now that we think that there are intergenerational issues in the tax system and in the housing market. We’re working through ways to try and address that.”

Economic modelling suggests changes to tax settings for investors could lower home prices by between 1% and 4%, but that it could lift home ownership rates by three percentage points as investors are discouraged from buying property.

He said boosting housing supply was “the main game” for more affordable homes.

“We care about there being affordable options for people. The biggest challenge in the housing market is we don’t have enough homes but we’re also focused on the composition of the home ownership base.”