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Negative gearing and CGT bill pass parliament
The federal government's sweeping tax reforms to capital gains tax and negative gearing have cleared both houses after Labor secured support from the Greens.
A major overhaul to investor tax policies, including capital gains tax (CGT) and negative gearing, has passed through both houses of parliament.
Changes to negative gearing and the capital gains tax (CGT) will go ahead after the Treasury Laws Amendment (Tax Reform No.1) Bill 2026 bill was approved.
The bill passed the Senate on Thursday, 25 June, before being returned to the House of Representatives, where amendments were rubber-stamped.
The legislation will amend multiple taxation settings, replacing the 50 per cent CGT discount, and imposing a 30 per cent minimum tax rate on capital gains accruing on and after 1 July 2027.
Additionally, negative gearing for residential investment properties will be limited to new builds, with the changes taking effect on the same date.
The bill also introduced a tax offset from the 2027–28 financial year for Australian residents who earn income from work.
It will give workers a standard $1,000 tax deduction, making it easier to reduce their taxable income without having to claim individual work expenses.
It came after Labor secured enough support from the Greens, agreeing to a range of demands to pass the bill through, including banning limited recourse borrowing arrangements (LRBAs) for residential property on Tuesday.
The change will effectively remove the primary mechanism SMSF investors use to leverage into real estate.
The Greens also secured an additional amendment to powers that would have allowed a future minister to wind back the reforms through regulation rather than legislation.
Later in the year, the government will introduce supplementary legislation to clear up matters such as the need for carve-outs for small businesses.
Additionally, it said it would address a provision in the reforms that would have barred jointly owned properties from qualifying for grandfathering exemptions if the couple divorced or one person died.
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