Global Daily Tax News, Australian Lawmakers Clear Much-Debated Tax Reform Law, (Sep 14, 2026)

The Australian Government has welcomed the passage of legislation to bring the Capital Gains Tax (CGT) treatment of foreign residents more into line with the treatment of Australians, targeting real property in particular.

The changes to the foreign resident CGT regime bring Australia's tax laws into closer alignment with the OECD Model Rules for the taxation of foreign residents and ensure foreign residents pay tax on assets including for infrastructure and other assets closely connected to Australian land, the Government said.

Specifically, as part of the 2024– Budget, in May 2024, the Government announced the legislation would:

• clarify and broaden the types of assets on which foreign residents are subject to CGT;

• amend the point-in-time principal asset test to a 365-day testing period; and

• require foreign residents disposing of shares and other membership interests exceeding AUD50m in value to notify the ATO, prior to the transaction being executed.

In the 2025– Budget, the Government confirmed the amendments will apply to CGT events commencing on or after January 1, April 1, July 1, or October 1 after the Act receives Royal Assent.

The Government announced further changes in the 2026– Budget, including providing a time-limited, targeted concession in the foreign resident CGT regime for investment in the renewables sector. The concession will apply to foreign investors disposing of certain renewable energy infrastructure assets from the first quarter following Royal Assent of the law, until June 30, 2030.

Further, the legislation includes provisions clarifying that the concept of "real property" in Australia is determined by Commonwealth legislation, rather than state and territory laws.

The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and other Measures) Bill 2026 also addresses issues raised by the PwC tax leaks scandal, and recommendations from an earlier review of the Tax Practitioners Board (TPB), through amendments to the Tax Agent Services Act. This includes a stronger sanctions framework including criminal penalties for unregistered tax preparers, new civil penalties for breaches of the Code of Professional Conduct, and increased penalty amounts, as well as new powers for the Tax Practitioners Board.