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 various changes to the proposed measure.
These changes take effect from 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.
More information
- Budget Paper no.2 2024–25 (PDF, 2.6MB)Taxable Australian property | Australian Taxation Office
- Budget Paper no.2 2025–26Foreign resident capital gains withholding overview | Australian Taxation Office
- Budget Paper no.2 2026-27External Link[Notification of non-Indirect Australian Real Property Interest declarations]
- Strengthening the foreign resident capital gains tax regime – draft legislationExternal Link[Foreign resident CGT concession for renewable energy assets]
- Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026External Link
- Taxable Australian property | Australian Taxation Office
- Foreign resident capital gains withholding overview | Australian Taxation Office