Australia extends renewable energy tax concession to 2040

The Australian government has amended legislation to extend a capital gains tax (CGT) concession for foreign investors in the renewable energy sector from 2030 to 2040. The amendment provides a 50% discount on new CGT liabilities for renewable energy assets, offering a decade-long extension intended to provide stability for long-term infrastructure projects.

The reform is part of a broader package aimed at clarifying how foreign residents are taxed when selling Australian assets, including telecommunications, rail, ports, and renewable energy infrastructure. The move follows significant pressure from industry groups and cross-bench MPs. The Clean Energy Investor Group had previously warned that a shorter concession window could trigger a “fire sale” of assets or deter the low-cost capital necessary to meet national energy transition targets.

By extending the discount period to June 30, 2040, the government aims to mitigate concerns that the tax changes would chill greenfield investment in wind, solar, and battery assets.