The federal government’s plan to change capital gains tax and negative gearing passed the House of Representatives, overcoming the first big hurdle in what could be a massive change to Australia’s taxes in decades.
The Treasury Laws Amendment Bill 2026 cleared the House with a vote of 94 to 48.
Prime Minister Anthony Albanese celebrated the win on social media, saying the House had delivered “tax cuts for every worker and a fair go for first home buyers.”
First introduced by Treasurer Jim Chalmers on May 28, the bill brings together several measures from the 2027 budget.
The key part of this is replacing the long standing 50% capital gains tax discount with cost base indexation and setting a minimum 30% tax rate on net capital gains.
The bill also limits negative gearing to newly built properties, aimed at boosting the building of new homes.
This would mean that investors buying established properties after 7.30 pm on May 12, the night of the Budget, will not be able to offset rental losses against their salary or other personal income.
Such losses could only be offset against other residential rental income or against future capital gains on rental properties.
Current rules would grandfather owners who held investment properties prior to that date.
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The package also includes a flat $250 tax cut for workers and a $1,000 automatic deduction for work-related costs.
The Senate battle ahead
The real test is in the upper house, where Labor needs crossbench support because they don’t have a majority there.
In the lower house, the vote showed a split among independent MPs. While Wilkie, Scamps, Ryan, Steggall, and Haines backed the government, others like Chaney, Spender, Sharkie, Le, Gee and Joyce, voted with the Coalition against the bill.
The Greens hold the balance of power in the Senate and have indicated general support for the direction of the reforms but intend to use the process to push the government further.
The bill has been automatically referred to the Senate Economics Legislation Committee for a brief inquiry with a report due by June 22.
The tight schedule leaves the government a narrow window to get it passed before the winter break on July 2.
Greens leader Larissa Waters and economic justice spokeswoman Nick McKim said in a joint statement the party would be examining “how and why Labor decided to leave in place the vast majority of tax handouts for the ultra wealthy”.
Some want the government to apply capital gains adjustments only to real estate instead of a broader range of assets.
Treasury’s consultations include meetings with the Council of Small Business Organisations and the Australian Chamber of Commerce and Industry.
The government also plans a second technical bill later this year to deal with startups, small businesses and trusts.
Right now, the government has the votes needed but has the tough job of rounding up enough support in areas where they’re short.
