Australia: Proposed legislation to amend capital gains tax and introduce new tax measures
Federal government proposes CGT changes, negative gearing restrictions, and new tax offsets for individuals.
may 28, 2026
The Australian federal government introduced legislation to parliament that aims to amend the capital gains tax (CGT) discount, restrict negative gearing in housing to new builds, and introduce a working Australians tax offset along with an AU$1,000 standard deduction for work-related expenses for individuals.
The bills—the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026—propose to:
- Replace the 50% CGT discount for individuals, trusts, and partnerships with cost base indexation so that only real gains are taxed
- Introduce a 30% minimum tax on capital gains, with an exemption for certain income support recipients
- Apply the new arrangements prospectively to all capital gains accruing on and after July 1, 2027, including gains accruing on pre-CGT assets, while retaining access to the CGT discount to maintain support for new and affordable housing, and maintaining existing CGT concessions for small business
- Restrict negative gearing for residential dwellings to new builds
- Introduce the working Australians tax offset, a non-refundable tax offset that provides targeted tax relief to Australian resident individuals who earn labor income
- Introduce an AU$1,000 standard deduction for work-related expenses for individuals who are Australian tax residents who derive assessable labor income, so that eligible taxpayers can rely on a simple deduction instead of claiming their work-related expenses