About this law change
On 14 May 2024, as part of the 2024–25 Budget, the government announced it would strengthen the integrity of the foreign resident capital gains tax (CGT) regime.
In the 2025–26 and 2026–27 Budget, the government announced changes to the proposed measure.
Changes from 1 October 2026
These changes commenced on 1 October 2026.
The changes include:
- clarifying and broadening the meaning of taxable Australian real property for the foreign resident CGT rules, including a new definition for ‘real property’ and adding water rights
- applying the principal asset test over the 365 days before a CGT event, rather than only at the time of the event
- introducing a notification requirement for certain foreign resident vendors making a declaration that membership interests are not indirect Australian real property interests
- providing a transitional 50% CGT discount for eligible foreign residents disposing of certain Australian renewable energy assets.
You can find out more and use the new form and instructions on Foreign vendor notification of non-IARPI declarations.
More information
- Budget Paper no 2 2024–25External Link
- Taxable Australian property
- Budget Paper no 2 2025–26External Link
- Budget Paper no. 2 2026–27External Link
- Strengthening the foreign resident capital gains tax regime – draft legislationExternal Link
- Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026External Link
- Foreign resident capital gains withholding overview