Treasurer promises to 'fix' property tax oversight, but won't say how exactly

Treasurer Jim Chalmers has pledged to "fix" an unintended consequence of the government's property tax overhaul, which could inadvertently penalize widows and divorcees. The issue emerged during parliamentary debate on changes to negative gearing and capital gains tax discounts. Independent Senator David Pocock highlighted that existing assets, which should be exempt, might lose favorable treatment if transferred due to death or divorce, as this constitutes a change of ownership.

The Coalition labeled this the "widows tax" and questioned if the government was aware of the implications for an estimated 680,000 properties before budget night. Although the tax changes passed parliament last week, the government assured it would resolve the issue before the laws take effect in July next year. The government committed to ensuring existing assets remain exempt if transferred through death or divorce.

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We will address it. If you want to use a different word, we will fix it and we'll make clear the way that we will fix it in the legislation that follows.

Chalmers confirmed the matter would be addressed in a second bill later this year but declined to provide specific details on the government's plan. "We will address it. If you want to use a different word, we will fix it and we'll make clear the way that we will fix it in the legislation that follows," he told ABC's Insiders. He noted that amendments and carve-outs are not unusual, citing similar provisions for small businesses to be legislated later this year. "What we do when issues are raised with us, we work through them in a pragmatic way, in a sensible way," Chalmers added.

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What we do when issues are raised with us, we work through them in a pragmatic way, in a sensible way.