Australia's Labor government pushes new capital gains tax reforms

The Australian Labor government passed the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 after a late‑night deal with the Greens, securing Senate support for sweeping housing investor tax changes. The legislation introduces a minimum capital gains tax (CGT) rate of 30 % from 1 July 2027 and replaces the existing 50 % CGT discount with an inflation‑linked calculation for all investments other than new property builds. It also creates a “deemed sale” on 30 June 2027, meaning investors must treat assets as if sold and rebought, resulting in a two‑step CGT calculation.

Critics, including independent senator David Pocock, warned the reforms could penalise widows and divorcees, leading to the withdrawal of an amendment aimed at protecting joint‑owned assets. The government expects 85 % of the $3.6 billion revenue forecast to come from changes to negative gearing, with the remainder from the new CGT rules. Treasury officials said further amendments may be addressed in a second legislative tranche.