Australia's Lower House Passes Bill for Biggest Tax Overhaul in Decades

Australia's House of Representatives has passed a landmark bill representing the most substantial tax overhaul in decades. The legislation, approved by a vote of 94-48, aims to make housing more affordable by significantly altering tax incentives for property investors.

The core of the reform involves replacing the existing 50% discount on capital gains for assets held over a year with a tax on inflation-adjusted gains. This change, set to take effect from July 2027 with a 30% minimum tax on net capital gains, is designed to cool the property market. Additionally, the government plans to limit negative gearing benefits to newly built homes, a move intended to stimulate the supply of new housing.

Prime Minister Anthony Albanese celebrated the bill's passage, stating on X that it includes "tax cuts for every worker and a fair go for first home buyers." The reforms also introduce new tax relief for workers, such as a A$250 tax offset and a new A$1,000 instant tax deduction, supplementing existing tax cuts that offer annual savings of up to A$536 for individuals.

The bill now proceeds to the Senate, where the government does not hold a majority and will need to secure support from crossbench members. The proposed changes have faced some opposition, with certain businesses advocating for exemptions from the capital gains overhaul and for changes to be confined strictly to real estate.

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Passed the House: tax cuts for every worker and a fair go for first home buyers.