A Labor government would halve the capital gains tax discount and limit negative gearing to those investing in new properties while grandfathering existing arrangements.
"Labor's housing affordability policies have been specifically designed to stimulate new housing supply," Mr Bowen argued in a statement.
Mr Reardon said the modelling shows while raising the capital gains tax would deliver a $500 million revenue gain for the federal government, it would be dwarfed by stamp duty tax losses to the states in excess of $1 billion per year.
"Increasing the tax on housing will result in less investment in housing, fewer houses being built and inevitably a worsening of the affordability challenge," Mr Reardon said.
He said the Reserve Bank, the Productivity Commission and federal and state treasurers have all identified the constraints on the supply of housing as an underlying cause of the housing affordability challenge.
But Mr Bowen says the association is at odds with an ever-increasing list of organisations and individuals calling for negative gearing and capital gains tax reforms.
These include the International Monetary Fund, the Organisation for International Cooperation and Development, the Grattan Institute, ACOSS, the Committee for Economic Development in Australia, the Australian Institute of Company Directors and the government's own financial system inquiry.
"Even the Property Council of Australia has a policy position in favour of cutting the capital gains tax discount from 50 to 40 per cent," he said.