If elected at the next Federal election, Labor leader Bill Shorten plans to restrict negative gearing to "newly constructed homes" and reduce the capital gains tax discount from 50 percent to 25 percent.

Both measures would come into force from July 2017, and all existing investments under the scheme would be fully "grandfathered" and protected against the changes.

Shorten is set to announce the plans today at a NSW Labor conference in Sydney. A pre-prepared speech provided to the ABC shows Shorten will state, "We will put the great Australian dream back within reach of working and middle-class Australians, who have been priced out of the market for too long. Our new economic policy will encourage the building of thousands of new homes every year and increasing housing supply, it will help lower costs for renters and it will return the Commonwealth budget to a sustainable foundation."

Costings from the Parliamentary Budget Office show the savings would be minimal for the first financial year, at $15 million in 2017-18 but quickly increase to $580 million in 2018-19.

The Federal Government has indicated it is also looking at negative gearing as part of its overhaul of the tax system.

See also:

NSW joins Vic, Qld with foreign investor taxes

Queensland increases surcharge on foreign buyers

Victorian government increases stamp duty for foreigners

Negative gearing debate ends Turnbull honeymoon