CANBERRA, ACT, May 28 -- The Treasurer of Australia issued the following media release:
Today, the Albanese Government is introducing legislation to deliver more tax cuts for Australian workers and tax reform to help more Australians own a home of their own.
This is all about helping more Australians get ahead and backing the Australian ambition of home ownership.
For too long it's been too hard for Australians, particularly younger Australians, to buy a home of their own and this government is acting now to change that.
This legislation will help 75,000 Australians realise the dream of homeownership, deliver a new round of tax cuts for more than 13million Australian workers and make tax time simpler.
This legislation is about cutting taxes again and again, making it easier to buy a first home, and better aligning the tax treatment of income from work and income from assets.
The Treasury Laws Amendment (Tax Reform No.1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 will implement the following reforms:
* Delivering a new Working Australians Tax Offset (WATO) to provide a permanent annual tax offset of up to $250 to every working Australian taxpayer. WATO will automatically reduce workers' tax liability on their income earned from working from the 2027-28 income year.* Introducing the $1,000 instant tax deduction from 2026-27 to allow workers to deduct up to a thousand dollars off their taxable income without keeping receipts.* Replacing the 50percent capital gains tax (CGT) discount with a new discount based on inflation for gains accruing from 1July 2027. Investors in new builds will have a choice between the 50percent discount and the new arrangements.* Introducing a minimum tax rate of 30percent on real capital gains accruing from 1July 2027. Recipients of certain income support payments, such as the Age Pension and Jobseeker, will be exempted from the minimum tax.* Limiting negative gearing for residential property to new builds from the 2027-28 income year. Arrangements will remain unchanged for all existing investments made before 7:30pm AEST on 12May 2026.
The Government's changes to CGT and negative gearing will back more Australians in their aspiration to get ahead and own their own home and support investment in new housing supply.
The changes will be prospective, limiting the impact on existing investments and preserving the gains investors have made.
Capital gains on existing investments that accrue prior to 1July 2027 will retain access to the 50percent discount, while capital gains which accrue from 1July 2027 will be subject to the new inflation‑based discount and the minimum tax. The changes to negative gearing will only apply to established properties acquired after the policy was announced on Budget night.
The new WATO and instant tax deduction build on the already legislated tax cuts that will come into effect from 1July 2026 and 1July 2027. The combined benefit for an Australian worker on average earnings from these measures will be up to $2,816 per year from 2027-28, compared to 2023-24 tax settings.
This is the first tranche of legislation to implement the Government's tax reforms. Legislating these core provisions is appropriate to ensure the core policy features that apply broadly to most taxpayers are in place, providing certainty to taxpayers and market participants.
Legislating significant reforms in tranches is a standard approach, and past reforms such as the GST and other major changes have similarly been implemented in tranches.
The Government is consulting with stakeholders on further details of these reforms including treatment of capital gains of small and start‑up businesses where indexation is applied to a low or zero cost base, as well as other complex and specific details such as interactions with attribution managed investment trusts (AMITs), tax consolidation, residency changes, and other issues.
Where appropriate, these details will be legislated following consultation. These changes build on our existing housing reforms to help level the playing field for first home buyers, help preserve the gains investors have made and incentivise productive investment in areas like new housing supply.
The Liberal and National Parties opposed this government's action to build more homes and voted against our last round of tax cuts. They have an opportunity now to back this Bill and put Australians first, put more money back in the hands of Australian workers and help more first home buyers into the market.
The legislation we introduce today is the first step towards delivering the most significant transformation of the tax system in over a quarter of a century and continues the Albanese Labor Government's record of responsible economic management.
Our reforms will make our tax system better, fairer and simpler and make our economy and our tax system work in the interests of more Australians.
Disclaimer: Curated by HT Syndication.
