Prime Minister Malcolm Turnbull has made housing affordability a key battleground in the upcoming election.

He and Treasurer Scott Morrison confirmed that tax offsets through negative gearing and the capital gains tax discount won’t be changed in the May 3 budget.

It wasn’t a big surprise given the government’s strident criticism of Labor’s plans to limit negative gearing to new properties should it win the likely July 2 election while halving the CGT discount from 50 to 25 per cent.

The prime minister said the opposition’s tax plan would deliver a “reckless trifecta” of lower home values, higher rents and less investment.

“This is not fine tuning, this is a big sledgehammer they are taking to the property market,” Mr Turnbull told reporters in Sydney on Sunday.

“We won’t have a bar of it.”

Shadow treasurer Chris Bowen said everyone knows there is a housing affordability crisis, but the prime minister “couldn’t care less”.

He challenged Mr Turnbull to show the evidence that house prices would crash under Labor’s policy.

“It’s a lie,” Mr Bowen told reporters in Sydney.

“He doesn’t have a plan for housing affordability. His plan for the election is to run a scare campaign.”

Mr Morrison, who will hand down a tax reform package with his first budget, said Labor’s proposal was nothing more than a housing tax.

“We have the commonsense to know we need to leave the system as it is,” he said.

Mr Turnbull said there was going to be big choice this election.

“If you vote for Labor and Labor wins government that means higher rents, lower home values, less investment. We believe … you need to see more investment in Australia.”

Greens leader Richard Di Natale said Mr Turnbull had turned out to be a “great disappointment”.

“We have some enormous challenges ahead of us as a nation … (but) he wants to have a silly little scare campaign about house prices,” Senator Di Natale told reporters in Melbourne.

He said by refusing to make changes to negative gearing and the CGT discount, the prime minister was continuing with unfair tax breaks that would mean less money to spend on schools and hospitals.

However, Housing Industry Association chief executive for industry policy Graham Wolfe said negative gearing promoted private investment in the residential rental market, stimulated economic activity and relieved pressure on social housing and the public purse.

“Negative gearing is not the domain of so-called ‘wealthy investors’,” Mr Wolfe said in a statement.

Australian Taxation Office data showed nearly eight of every 10 taxpayers with a rental property declare a taxable income of less than $100,000, while 70 per cent earn less than $80,000, he said.