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Negative gearing amendments pass Parliament
Investors and home owners have gained clarity on property tax reforms, including the “widow tax”, following the bill’s passage through the Senate.
The second tranche of tax reform, the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026, passed the Senate on Wednesday, 19 August.
The Bill featured amendments to negative gearing that ensured properties acquired from a spouse following a relationship breakdown or through inheritance retained their tax treatment, often referred to as the “widow tax”.
Similarly, the tax treatment extends to someone who inherits property in which they already held an ownership interest.
The provisions in the Bill also ensure that new builds retain access to negative gearing and concessional capital gains tax treatment in the same circumstances.
“The legislation also includes the further implementation details we flagged at the outset of the tax reform process, providing certainty for people who acquire an interest in property as a result of inheritance or relationship breakdown,” Treasurer Jim Chalmers said.
Chalmers said the amendments, which were featured in the consultation opened to the public in early August, would help to level the playing field for first home buyers, while preserving the gains of investors and supporting housing delivery.
“Legislating significant reforms in tranches is a standard approach, and we’ll continue to deliver more tranches of reform in the coming months, consistent with past reforms such as the GST and other major changes,” Chalmers said.
“Our reforms are all about making our economy work in the interests of more Australians, businesses and future generations, delivering more support for small business, more tax cuts for workers, and making it easier for Australians to buy their first home.”
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