Australian government passes $10M tax bill

• The Australian Government has passed legislation to replace the 50% capital gains tax discount and restrict negative gearing.
• The immediate market impact is a restricted property investment structure alongside a new active asset concession threshold.
• The strategy aims to make the housing market fairer for first home buyers and increase overall housing supply.

The Australian Government executed a legislative tax agreement replacing the 50% capital gains tax discount with cost indexation.

The new framework alters previous taxation laws that allowed a flat deduction for assets held over 12 months.

The legislation increases the small business active asset concession turnover threshold from $2 million to $10 million.

Most of the policy adjustments will come into effect from July 1, 2027.

An instant asset write-off deduction of $1,000 for workers will become effective earlier on July 1.