Labor policy will allow investors to negatively gear multiple newly constructed properties, even though Opposition Leader Bill Shorten is reluctant to say so.
One of Mr Shorten's major lines of attack for limiting the use of negative gearing is that investors buying several established properties crowd out first-time buyers.
Asked by reporters on Thursday whether there would be a limit to the number of new properties an individual could invest in under Labor's plan, Mr Shorten said there wouldn't be a cap.
Asked if that meant an investor could buy any number as long as it was new housing stock, he said: "You know the rules as well as I do."
Meanwhile, the government is said to be considering putting a cap of $50,000 on claimable losses for negative gearing.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Previous speculation was that it would be limited to $20,000.
It is also said to be considering curbing the amounts high-income earners can divert to superannuation in pre-tax income to $20,000, down from $30,000, or $35,000 for those over age 50.
Labor was dismissive of that plan.
"If this is where the broad-ranging tax debate lands us, every claim Malcolm Turnbull made that he would provide economic leadership, is dead," opposition finance spokesman Tony Burke told Sky News.
Both business and trade unions want to see action on tax reform.
Mark Harrison, from business consultants Pitcher Partners, despairs at the minimalist approach being taken.
"Over the past two months we've seen the government back away from every major tax policy position they've held," he said.
"The government seems to have confused tax reform with a politically motivated, politically safe strategy aimed at fending off criticism from the opposition."
An ACTU poll found seven out of 10 respondents support limiting super tax exemptions for high-income earners, while 57 per cent agree that capital gains tax discounts should be reduced.
Amid a government scare campaign half the respondents believe negative gearing should not apply to established homes, in line with the finding of a Newspoll earlier in the week.
But Liberal senator Cory Bernardi says the government should not change the tax incentive whatsoever.
"We are opening a can of worms - it's much better to say we're not touching it," he told Sky News on Thursday.
