Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (49 of 2026)

Schedule 1   CGT adjustments

Part 1   Main amendments

Income Tax Assessment Act 1997

30   After section 115-100

Insert:

115-102 New residential dwellings

(1) This section applies to a *discount capital gain if:

(a) you are an individual; and

(b) neither section 115-105 nor 115-110 (about foreign or temporary residents) applies to the discount capital gain; and

(c) either:

(i) you make the discount capital gain from a *CGT event happening on or after 1 July 2027 in relation to a *CGT asset covered by subsection (2); or

(ii) because of section 115-215, Division 102 applies to you as if you had made the discount capital gain for a *capital gain of a trust covered by subsection (4); and

(d) where subparagraph (c)(ii) applies - the trust's capital gain was made directly, or indirectly through one or more entities that are all covered by subsection (4), from a CGT event happening on or after 1 July 2027 in relation to a CGT asset covered by subsection (2).

Note: The discount percentage for the discount capital gain is 50% (see paragraph 115-100(a)).

CGT assets to which this section relates

(2) This subsection covers a *new residential dwelling.

Relevant trusts and interposed entities

(4) This subsection covers the following:

(a) a trust, other than a *superannuation fund or a public unit trust (within the meaning of section 102P of the Income Tax Assessment Act 1936);

(b) a partnership.

Note: For paragraph (a), a trust includes a managed investment trust.

Indexation may be able to be chosen as an alternative

(5) Despite subsection (1), the following person may choose for this section not to apply to the *discount capital gain:

(a) if you make the discount capital gain in the way described in subparagraph (1)(c)(i) - you;

(b) if you make the discount capital gain in the way described in subparagraph (1)(c)(ii) - the trustee of the trust.

Such a choice by the trustee applies to you in a similar way to a choice made by you for a gain covered by paragraph (a).

Note: Instead, the cost base of the CGT asset may be able to be indexed (see subsection 110-36(1A)).