July - GDL Newsletter 2026

GROW, SCALE AND MASTER

By Andrew McCallum

Changing Era

Recently, the Federal Government has announced significant changes to its proposed tax reforms, softening several aspects of the original package after strong feedback from businesses, investors and the broader community. Here's what you need to know...

What's Changed?

1. Small Businesses Get Relief

Originally, many small business owners were concerned they would lose access to important capital gains tax concessions when selling their business.

The Government has now increased the turnover threshold from $2 million to $10 million, meaning around 98% of Australian businesses are expected to retain access to these concessions.

2. Start-ups Receive Special Exemptions

Innovative startup businesses have been given a carve-out from some of the proposed changes.

The Government says it wants to continue encouraging entrepreneurship, investment and risk-taking, with Treasury now consulting on exactly how these exemptions will work.

3. Testamentary Trusts Exempted

Trusts established through wills and estates will no longer be subject to the proposed 30% tax treatment. This provides greater certainty for families undertaking estate planning and wealth transfer arrangements.

4. Treasurer's Discretionary Powers Reduced

The Government has removed 9 proposed ministerial discretion powers following criticism that they concentrated too much authority in the hands of the Treasurer.

What Hasn't Changed?

Despite these concessions, several major reforms remain in place:

The move away from the traditional 50% Capital Gains Tax discount remains scheduled to commence from 1 July 2027.

Changes to negative gearing are still proceeding.

Existing investment holdings continue to retain their current treatment under the grandfathering provisions.

The Matusik Seven

New housing is first and foremost a capital problem. Governments don’t build homes, the private market does. And private investors fund almost all rental housing. Capital follows the best or at least better returns. No new housing supply happens unless development is profitable. Policy must match buyer ambition. In short, economics wins.