Australia’s Lower House Passes Biggest Tax Reform Package in Decades
Australia's House of Representatives has passed the government's biggest tax reform package in decades, advancing changes aimed at improving housing affordability and delivering additional tax relief. The reforms would limit negative gearing to newly built homes, replace the current capital gains tax discount system, and introduce a new 30% minimum tax on net capital gains from July 2027. The package also includes a A$250 tax offset and a A$1,000 instant tax deduction for workers. The legislation must now secure support in the Senate before it can become law.
Australia lower house passes big tax reforms to lift housing affordability, provide new tax relief
Australia's House of Representatives on Thursday approved what the government has called the most significant tax overhaul in decades, including key reforms to make homes more affordable and give workers additional tax relief.
Despite opposition attacks to alter the legislation, the bill passed the lower house by a vote of 94 to 48. The reforms now go to the Senate, where the government is in a minority and will need help from crossbenchers for the package to become law.
Central to the plan is a change expanding rules governing capital gains taxes. The government will also change the existing 50% cap on revenue tax as well as gains tax for properties. A new 30% minimum tax rate on net capital gains is expected to take effect starting from July 2027.
They would also reform negative gearing, the tax rule that lets property investors offset losses from an investment against income that is taxable. The new plan means negative gearing benefits are only available on newly constructed homes to encourage investment in new housing supply so first-home buyers can afford a home.
Prime Minister Anthony Albanese lauded the vote X, posting: “Passed the House:: tax cuts for every worker and a fair go for first home buyers."
There are also new measures in the package to provide tax relief to workers. The A$250 tax offset would be given to Australians and a new instant tax deduction worth A$1,000. They would be added to previously approved tax cuts that are forecast to save individual taxpayers up to A$536 a year.
Certain business groups had called on the government to keep capital gains changes limited to property investments. The reforms went ahead, government overall of Australia’s tax structure and response to concerns about housing responsibility.
FAQs
- What did Australia's lower house vote on?
Ceremonial launching of a larger tax reform package to deal basically with housing and tax relief issues.
- What happens to negative gearing?
This would only apply to newly built homes.
- Has the bill become law yet?
No, it still must go through the Senate.
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