Australia: Consultation on second tranche of capital gains tax, negative gearing reforms legislation
Consultation closes August 21, 2026.
August 6, 2026
The government initiated a consultation on a second tranche of legislation implementing the reforms to capital gains tax (CGT) and negative gearing announced in its 2026‑2027 budget, comprised of:
- Treasury Laws Amendment (Tax Reform No. 3) Bill 2026: CGT adjustments (tranche 2), clarifying the operation of the CGT amendments for more complex or specific arrangements and making additional technical and policy changes
- Income Tax Assessment (Method for Apportioning Capital Gains and Capital Losses) Determination 2026, prescribing an apportioning method for capital gains and capital losses between deferral realization events happening on or after July 1, 2027, in relation to CGT assets, and earlier CGT events relating to those CGT assets
- Treasury Laws Amendment (Tax Reform No. 3) Bill 2026: negative gearing (tranche 2), addressing the interactions of the amendments in the Treasury Laws Amendment (Tax Reform No.1) Act 2026 and the rules for acquisitions as they apply to joint tenancy and tenants-in-common arrangements, acquisitions flowing from the finalization of financial matters between former spouses, and acquisitions via inheritance
- New residential dwellings & residential dwellings used for certain determined activities or purposes not subject to loss quarantining, providing the definition of “new residential dwellings” and housing investment exemptions for inclusion in the Income Tax Assessment Act 1997
Additional tranches of legislation are expected to finalize implementation of the reforms.
The consultation closes August 21, 2026.