Australia passes tax overhaul cutting CGT discount and restricting negative gearing

The Treasury Laws Amendment (Tax Reform No.1) Bill 2026, introduced to the House of Representatives, will replace the 50 % capital gains tax (CGT) discount for individuals, trusts and partnerships with cost‑base indexation and a minimum 30 % tax rate on capital gains from 1 July 2027. It also limits negative gearing for residential property investments to new builds from the same date and adds a Working Australians Tax Offset and a $1,000 standard deduction for work‑related expenses.

Business groups—including the Australian Chamber of Commerce and Industry, AI Group, the Business Council of Australia and the Council of Small Business Organisations Australia—issued a joint statement ahead of a Senate inquiry, arguing the measures will reduce productivity, deter investment and make Australia less competitive. The Senate inquiry’s first hearing is scheduled for Monday.

The government defends the reforms, claiming they will help an additional 75,000 Australians purchase their first home over the next decade, and aims to pass the changes by early July, though opposition parties and the Greens have not committed support.