Labor MPs erupted into applause after the Albanese Government secured Senate approval for its suite of housing tax reforms, including changes to capital gains tax and negative gearing.
Under the legislation, the 50 per cent capital gains tax (CGT) discount will be scrapped, while negative gearing will be limited to newly constructed properties.
Existing investments will be grandfathered, ensuring current property owners are not affected.
The reforms passed the upper house with the support of independent senators Lidia Thorpe and David Pocock, who joined Labor and the Greens in backing the package. The Coalition and One Nation opposed the changes.
The legislation will head to the House of Representatives later tonight, where it is expected to pass comfortably.
The government moved to curtail parliamentary debate on the bill, invoking a so-called ‘guillotine’ to fast‑track its passage.
Prime Minister Anthony Albanese confirmed on Tuesday that he had reached a deal with Greens leader Larissa Waters to secure the passage of the reforms.
Under the deal with the Greens, the Federal government will close a loophole where people can buy property through self managed super funds and access a capital gains tax rate of just 10 per cent.
The Albanese government’s changes to capital gains tax and negative gearing have passed
The budget changes passed the Senate following the support of the Greens and Independents
‘These changes don’t in any way change the tax arrangements for superannuation, don’t impact any existing SMSF borrowing arrangements and provide time to finalise arrangements that are in train,’ the government said in a statement.
Despite passing parliament, the Albanese government will move to amend its tax legislation to ensure Australians who take full ownership of a property after a death or divorce can retain grandfathering protections under changes to negative gearing and capital gains tax.
The shift comes after pressure from Senator Pocock, who raised concerns about the so‑called ‘widows tax’, a scenario where surviving partners could lose access to existing tax concessions.
Labor voted against an amendment to fix the issue in the current bill, but says it will address the problem in subsequent legislation.
‘In relation to the issues that were raised by the senator, and I think Senator Gallagher discussed yesterday, I can indicate the government does intend to address these issues in subsequent legislation,’ Foreign Minister Penny Wong said.
Liberal Deputy Leader Jane Hume accused the government of either ‘incompetence’ or ‘bad faith’ in Question Time following the vote.
‘It’s clear that the widow tax was actually a deliberate design feature of the Albanese government’s heartless tax grab,’ she said.
‘It was either rushed and incompetent or it was tricky and mean. Are you only allegedly planning to change these arrangements because you have been found out?’
