Federal Cabinet formally examined the impact of tax breaks on Australia's booming housing market in early 2016 but decided not to act, an ABC investigation has revealed.

Key dates: February 11—19: Date range for which the ABC sought documents about negative gearing and capital gains tax

Date range for which the ABC sought documents about negative gearing and capital gains tax February 13: Federal Opposition announced proposal to restrict negative gearing and halve the capital gains tax discount

Federal Opposition announced proposal to restrict negative gearing and halve the capital gains tax discount February 18: Treasurer Scott Morrison said "there are excesses" in negative gearing and the Government was considering changes

Treasurer Scott Morrison said "there are excesses" in negative gearing and the Government was considering changes February 19: Prime Minister Malcolm Turnbull launched the Government's blistering attack on Labor's "very crude" policy

Amid rapid price growth in many capital cities, the Government has indicated next month's budget will include a housing affordability package.

But instead of making changes last year, the Coalition embarked on a blistering campaign against Labor's plans to curb property tax concessions.

That is despite the issue being considered at the highest levels of the Turnbull Government as early as February 2016.

Using the Freedom of Information Act, the ABC sought Treasury documents produced between February 11 and 19, 2016 about the impact of negative gearing or capital gains tax concessions on housing.

More than a year later, the department said it had identified five documents but refused to release them, citing Cabinet confidentiality.

"Two documents within the scope of your request were submitted to Cabinet after having been brought into existence for the dominant purpose of submission to Cabinet," an official wrote in a letter (below).

"I am satisfied that the remaining three documents are draft versions of Cabinet submissions."

Treasurer admits to 'excesses' in negative gearing

As late as February 18, 2016, Treasurer Scott Morrison said "there are excesses" in negative gearing and the Government was considering changes.

But he and the Prime Minister reportedly faced resistance from several ministers and Cabinet's powerful financial sub-committee, the Expenditure Review Committee (ERC), killed the idea.

It is not clear whether the documents went to the full Cabinet or the ERC.

Labor announced its plan to restrict negative gearing to new homes and to halve the capital gains tax discount on February 13.

Morrison lobbied for change: Bowen

Shadow Treasurer Chris Bowen said it was now confirmed Mr Morrison knew there were problems with negative gearing and was lobbying for change.

"The Prime Minister and the Treasurer had told Cabinet that negative gearing should be reformed and they'd been rolled by Cabinet in an unprecedented way," Mr Bowen said.

Chris Bowen says Mr Morrison knew of the problems with negative gearing. ( ABC News: Matt Roberts )

"A cabinet considers things when there's a firm recommendation before it.

"You don't get a recommendation from a minister to say, 'Everything's hunky-dory, we don't need to do this'.

"This just confirms what we already basically knew — that Scott Morrison says one thing about negative gearing when he's running his cheap little scare campaign; behind closed doors he's saying another thing."

Mr Morrison played down his department's submissions to Cabinet.

"As the Prime Minister has previously noted, Treasury regularly conducts analysis on many policy issues, which is their job," he told the ABC.

PM refused to comment on reports in August

The Prime Minister was asked in Parliament last August about reports he and Mr Morrison favoured changes to negative gearing but were defeated in Cabinet.

Mr Turnbull replied: "We do not comment on Cabinet discussions other than to say that the story recounted by [academic and author Peter] Van Onselen, apparently in his book, has no basis in fact at all.

"Indeed, it is a reminder of Mark Twain's very wise words that 'only fiction has to be credible', and in this case it is not even credible."

Data released this week by property group CoreLogic showed annual price growth of 19 per cent in Sydney, 16 per cent in Melbourne and 13 per cent nationally.

Reserve Bank Governor Philip Lowe on Tuesday said "the taxation arrangements that apply to investment in residential property in Australia" were helping fuel an unhealthy appetite for interest-only loans.

Negative gearing allows investors who make a loss to reduce the tax they pay on other income, costing the budget billions of dollars annually.

The capital gains tax discount generally sees half the profits from the sale of an investment go untaxed.

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