The Greens will support the Albanese government’s negative gearing and capital gains tax changes under a deal that will delay and tweak Labor’s planned overhaul of the national disability insurance scheme.

The minor party announced its position on Tuesday morning, clearing the path for Labor to pass its contentious budget centrepiece before federal parliament rises for the winter break.

The Greens resolved to support the tax bills after the government agreed to remove a loophole allowing investors with self-managed super funds to continue taking advantage of the tax breaks, along with ministerial powers enabling the government to reverse the reforms in the future.

The prime minister, Anthony Albanese, said the changes were important reforms in the national interest.

“Most Australians have nothing to sell but their time, nothing to give but their hard work, and that’s how they earn an income,” he said.

“That’s how they put food on the table, and we want those people, those hard-working Australians, to have the opportunity to own their own home.”

The Greens leader, Larissa Waters, said Labor’s reforms to the tax breaks were a “small step in the right direction” to tackle the housing crisis.

“It could have been so much better, but it is a small step in the right direction, and the Greens will vote to see it pass the parliament this fortnight, but we will not stop fighting for renters, we will not stop fighting for young people, and for all Australians to be able to afford a roof over their heads,” she said.

Under the proposed changes, the capital gains tax discount of 50% on profit made from sold assets would be changed to a cost-based indexation model from July 2027.

Negative gearing concessions would also no longer apply to investment properties bought after 7.30pm on 12 May 2026, with exceptions for new builds and some government housing programs open to investors.

The government last week announced several changes to its capital gains tax proposal, including winding back the treasurer’s discretionary powers to allay one of the Greens’ major concerns.

As part of negotiations with Labor, the Greens secured an eight-week extension to a Senate inquiry into the NDIS changes and negotiated several amendments, including to limit the scope of the minister’s powers to make blanket cuts to categories of participant supports.

The minor party will still vote against the legislation, which it considers “cruel” and harmful to the more than 240,000 people expected to be forced off the disability scheme under the drastic cost-saving plan.

The findings of a Senate inquiry into legislation to contain the ballooning cost of the NDIS were scheduled to be tabled on Tuesday, after being delayed twice last week.

The inquiry will now be extended until 14 August, allowing extra time for further public hearings and consideration of the thousands of submissions presented to senators.

The committee heard widespread concerns from disability advocates, providers and the states and territories about Labor’s drastic plan to save $37.8bn over four years, including by tightening eligibility criteria and subjecting all participants to independent functional assessments.

The legislation would also give the minister power to cut entire categories of support, which Butler intends to use to slash the stream of funding that participants use to hire support workers to allow them to engage with the community.

The Greens’ disability spokesperson, Jordon Steele-John, has negotiated an amendment that will shield other categories of support from that power, including funding allocated for daily living, assisted technology, consumables and home modifications.

Supports that people rely on for daily health needs, attending medical appointments or getting to work would also be protected.

The minor party has also secured guarantees that people would not have to subject themselves to restrictive practices – such as forced medication – to meet the new requirement that all treatment options are exhausted before they can access the NDIS.

The health minister, Mark Butler, said he remained “utterly convinced” that Labor’s plan was the right approach despite the backlash.

“It’s hard reform, but I’m not going to sugarcoat the fact that big change needs to happen to the NDIS. We’ve designed that change very carefully,” he said.

The Greens will use the eight-week delay to build pressure on Labor to abandon the reform entirely, with Waters vowing to “push in every possible way for this bill to never pass”.

The government will need to draft a second piece of legislation to deal with trusts and a special capital gains tax concession for start-ups, which will require a fresh round of negotiations with the Greens.

The potential deals between Labor and the Greens will infuriate the Coalition, which offered to work with the minor party to extend the NDIS inquiry for six months in exchange for more scrutiny of the tax bills.

The government will need the opposition’s support to pass the NDIS after the inquiry publishes its findings in mid-August.