In a landmark decision, Australia’s House of Representatives has approved a comprehensive tax reform bill designed to address the nation’s housing affordability crisis. The bill, which passed with a 94-48 vote, seeks to curb tax breaks for property investors and eliminate the capital gains discount, marking the most significant overhaul of the tax system in decades.

Key Provisions of the Tax Reform

The reform introduces a tax on inflation-adjusted gains to replace the existing 50% capital gains discount for assets held longer than a year. Additionally, a 30% minimum tax on net capital gains will be implemented starting July 2027. These measures aim to redirect investment towards new housing supply by limiting negative gearing to newly built homes.

Prime Minister Anthony Albanese highlighted the bill’s benefits on social media, stating, “Passed the House: tax cuts for every worker and a fair go for first home buyers.” The reform also includes a new tax offset of A$250 and an instant tax deduction of A$1,000, supplementing previously legislated tax cuts that provide annual savings of up to A$536 for individual taxpayers.

Challenges Ahead in the Senate

Despite its passage in the lower house, the bill faces challenges in the Senate, where the government does not hold a majority and will need support from crossbench members. Some businesses have expressed concerns, urging the government to limit the capital gains changes to real estate alone.

The reforms were initially unveiled in the federal budget last month and represent a significant shift in Australia’s approach to taxation, particularly in the real estate sector. As the bill moves to the Senate, its potential impact on the housing market and broader economy will be closely watched.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.