The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 was introduced to Parliament on 28 May 2026 and proposes the following reforms which were announced as part of the 2026/27 Federal Budget on 12 May 2026.
The final substance of these reforms will be determined as the Bill makes its way through the Parliamentary process, and we will keep you informed of this progress.
| Reform | Proposed Commencement Date |
| Simplifying expense deductions for Australian resident individuals who earn “assessable labour income” – a standard deduction for work-related expenses of $1,000 will be allowed without the substantiation requirements. | 1 July 2026 |
| A “Working Australians Tax Offset” (WATO) of $250 to be made available to Australian resident individuals who earn labour income. This will be a non-refundable tax offset. | 1 July 2027 |
| Capital gains tax adjustments: Removal of the 50% CGT discount for investments held by individuals, trusts and partnerships for more than 12 months. This is to be replaced with cost base indexation.Introduce 30% minimum tax on capital gains, with an exemption for certain income support recipients.To apply to capital gains accruing on and after 1 July 2027, including on pre-CGT assets. | 1 July 2027 |
| Limiting negative gearing: Restricting negative gearing on residential properties to “new builds” only. Rental losses on all other residential properties are to be quarantined and carried forward to be offset against future rental income.Residential properties owned prior to 12 May 2026 are not subject to these new limitations. | 1 July 2027 |