The CGT ‘backflip’ is more tweak than transformation. Labor hasn’t changed its mind on housing
Summary
The Australian Labor government made some small changes to its planned capital gains tax reforms after facing criticism. These adjustments include raising the small business turnover limit and creating new tax discounts for start-ups, but the overall goal to help young Australians buy homes remains unchanged.Key Facts
- Labor proposed changes to capital gains tax aimed at helping people buy homes.
- After public backlash, they raised the small business turnover limit from $2 million to $10 million for tax concessions.
- A new 50% capital gains tax discount will be available for "innovative" start-ups.
- All testamentary trusts are exempt from the proposed 30% minimum tax rate to avoid a so-called "death tax."
- The treasurer’s discretionary powers to set rules will be reduced.
- These changes will reduce expected government revenue by $475 million but still aim to raise $8.1 billion overall.
- Opposition parties and business groups remain critical and want the tax changes scrapped.
- The government will try to pass the reforms through the Senate, negotiating especially with the Greens, who remain cautious.
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