Australia: Legislation amending capital gains tax, introducing other new tax measures passes lower house of Parliament
Other tax measures include negative gearing restrictions and new tax offsets for individuals.
Legislation seeking to amend the capital gains tax (CGT) discount, restrict negative gearing in housing to new builds, and introduce a working Australians tax offset and an AU$1,000 standard deduction for work-related expenses for individuals, passed the lower house of Parliament (House of Representatives).
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-based 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 and derive assessable labor income, so that eligible taxpayers can rely on a simple deduction instead of claiming their work-related expenses
Both bills have been referred to the Senate Economics Legislation Committee for inquiry and report by June 19, 2026. Submissions to the inquiry are due by June 9, 2026, with public hearings to be held on June 15 and 16, 2026.