Controversial tax changes will further deplete social cohesion, the coalition claims, as the measures pass parliament.
The Greens struck a deal with the government to pass curbs to negative gearing and the capital gains tax discount, which cleared the Senate on Thursday.
Settings for capital gains tax will change from July 2027, with the standard 50 per cent discount replaced by cost-base indexation and a 30 per cent minimum tax rate.
The changes will be extended to all assets, including businesses, although the government announced a carve-out to placate the startup sector, which has complained it will be uniquely impacted by the new arrangements.
Negative gearing and the capital gains tax discount will be grandfathered for investors who already own properties but won't be able to be used for purchasing established homes.
However, people who jointly own an investment property with their spouse will lose their grandfathered tax breaks if their spouse dies or they divorce.
The government confirmed on Thursday it would amend the laws in future legislation to remove the "widow's tax", as critics have dubbed it.
"Either by design they're targeting widows as they're grieving, or they don't understand the consequences and they're financially bullying widows in their moment of grief," shadow treasurer Tim Wilson said.
Opposition Leader Angus Taylor used his appearance at the Committee for Economic Development of Australia's State of the Nation conference to partly blame Labor's policy for a downturn in social cohesion.
"The economy is flatlining. You see that in standards of living and delinquency," he said, suggesting it was the responsibility of political leaders across the board to "engage in a different way" with voters.
"There is deep frustration," he said before reiterating the coalition's stance on Labor's tax policy.
"If you've got a housing supply crisis, you need more houses, and I start with a very simple principle of taxation.
"(If you) tax savings and investment more, you get less savings and investment. If you tax more businesses more, you get less small businesses.
"We need more of all of those things if we're going to have the prosperity and rising incomes."
Earlier in the day, One Nation leader Pauline Hanson took her "fire the liar" campaign to Parliament House, accusing Labor of breaking its promise not to change CGT and negative gearing arrangements.
Three mobile billboards drove past the building's forecourt while Senator Hanson criticised the federal government's broadly unpopular budget.
"People have had a gutful," she told reporters.
Senator Hanson also spoke with students visiting parliament from the NSW mid-north coast town of Lismore, with some advice for one who wanted to be a politician.
"It's about the people. They are expecting you to make the right decisions for their future," she said.
She and her One Nation colleagues voted against the tax changes, as did some independent senators.
Australian Associated Press