BUDGET REVIEW: Fundamental reforms to the CGT regime

1 day ago
1 min read

1.1 Replacing the 50% CGT discount with indexation

From 1 July 2027, the 50% CGT discount will be replaced by cost base indexation for assets held for more than 12 months, with a 30% minimum tax on net capital gains.

These changes will apply to all assets, including pre-CGT assets, held by individuals, trusts and partnerships.

Transitional arrangements will limit the impact on existing investments by ensuring the changes only apply to gains accruing on or after 1 July 2027. The 50% CGT discount will continue to apply to gains that accrued before 1 July 2027.

Capital gains on pre-CGT assets that accrued before 1 July 2027 will remain exempt from CGT.

Furthermore, investors in new residential properties will be able to choose either:

the 50% CGT discount; or
cost base indexation and the 30% minimum tax.

Income support payment recipients, including Age Pension recipients, will be exempt from the minimum tax.

Assets that are sold prior to 1 July 2027 will continue to be subject to the existing rules.

1.2 Foreign resident CGT regime

The Government will provide a time-limited, targeted concession in the foreign resident CGT regime for investment in the renewables sector.

The transitional arrangement will apply to foreign investors disposing of certain renewable energy infrastructure assets from commencement, being the first day of the next quarter after Royal Assent until 30 June 2030.

Comments

BUDGET REVIEW: Measures impacting individuals

4.1 Introducing a Working Australians Tax Offset The Government will introduce a $250 Working Australians Tax Offset with effect from the 2028 income year. This new offset will provide a permanent annual tax offset for Australians for their income derived from work such as salary and wages and the business income of sole traders. 4.2 $1,000 Standard Deduction for Work-related Expenses The Government will introduce a standard tax deduction of up to $1,000 for work-related expe

BUDGET REVIEW: Reducing the FBT concession for electric cars

From 1 April 2029, a permanent 25% discount on FBT will be available for all electric cars valued up to and including the fuel-efficient luxury car tax threshold, implemented through a 15% rate in the statutory formula. The following transitional arrangements will apply: All eligible electric cars will retain the FBT discount rate that was in place when the arrangement commenced. All electric cars valued up to and including $75,000 that are provided before 1 April 2029 will c

BUDGET REVIEW: Reforming negative gearing for residential property investments

From 1 July 2027, losses from established residential properties will only be deductible against rental income or the capital gains from residential properties. Excess losses will be carried forward and are able to be offset against residential property income in future years. These changes will apply to established residential properties acquired from 7:30 PM (AEST) on 12 May 2026. Properties acquired prior to this time (including contracts entered into but not yet settled)