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Strengthening the foreign resident capital gains tax regime

The government will strengthen the integrity of the foreign resident capital gains tax (CGT) regime.

Last updated 16 July 2026

2024–25 budget announcement

On 14 May 2024, as part of the 2024–25 Budget, the government announced it will strengthen the integrity of the foreign resident capital gains tax (CGT) regime to:

  • ensure foreign residents pay their fair share of tax in Australia
  • provide greater certainty about the operation of the rules.

The amendments will:

  • 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
  • require foreign residents disposing of shares and other membership interests exceeding $50 million in value to notify the ATO, prior to the transaction being executed.

This measure is not yet law.

2025–26 budget announcement

In the 2025–26 Budget, the government announced the amendments will apply to CGT events commencing on or after 1 January, 1 April, 1 July or 1 October after the act receives Royal Assent.

2026–27 budget announcement

The government announced further changes in the 2026–27 Budget, by 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 30 June 2030.

The government intends to amend the law to clarity that the concept of ‘real property’ in Australia is determined by Commonwealth legislation rather than state and territory laws.

Consultation

The Treasury conducted a consultation processExternal Link seeking stakeholder views on specific implementation details of the 2024–25 Budget announcement from 23 July 2024 to 20 August 2024.

The Treasury recently consulted on the Strengthening the foreign resident capital gains tax regimeExternal Link draft legislation. Consultation ended on 24 April 2026.

Introduction

Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026External Link was introduced into parliament on 2 July 2026. The changes will take effect on the 1 October, 1 January, 1 April or 1 July immediately following Royal Assent.

For more information, see:

QC102086