Australia's capital gains tax regime is being restructured from 1 July 2027, and on 18 June 2026 the Albanese government locked in a set of targeted concessions for small businesses and startups that partially offset the headline reform's reach.

The core change, announced in the 2026 Budget, abolishes the flat 50 per cent CGT discount available to individuals and replaces it with two mechanisms: an inflation-based discount that adjusts the cost base of an asset, and a 30 per cent minimum tax rate floor on capital gains. Treasurer Jim Chalmers introduced the enabling legislation — the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 — in a second reading speech on 28 May 2026. The structural logic is to tie tax relief more tightly to real economic gain rather than to the time an asset was held.

The carve-outs announced on 18 June matter because the original reform, as framed in the Budget, attracted sustained pushback from business groups worried about its impact on founders selling stakes in closely held companies and on small operators with illiquid assets. Chalmers was still in active consultation with those groups as recently as 15 June, according to ABC reporting from that date.

What the Small Business Carve-Outs Cover

The four existing small business CGT concessions — the 15-year exemption, the active asset reduction, the retirement exemption, and the rollover — are being retained in full under the new framework. That alone preserves a significant set of exit-planning tools that operators and their advisers have built strategies around for decades.

More substantively, the government lifted the turnover threshold for the small business 50 per cent active asset reduction from $2 million to $10 million. Prime Minister Albanese's office confirmed on 18 June 2026 that this expanded concession now covers 98 per cent of all Australian businesses by count. In practice, that means the great majority of owner-operated enterprises selling active business assets will apply a 50 per cent reduction before the 30 per cent minimum rate floor kicks in — substantially compressing the effective rate relative to what a straight reading of the reform implied.

The $10 million threshold aligns the active asset concession with the existing small business entity threshold used across the tax system, removing a longstanding mismatch that had pushed some small operators into the general CGT discount regime despite otherwise qualifying for small business treatment.

What Expires and What Remains Uncertain

Separate from the CGT reform, the Temporary $20,000 Instant Asset Write-Off is set to expire on 30 June 2026 — effectively, this week. Its lapse is unrelated to the CGT changes but relevant to any small business doing near-term capex planning; the two measures operate on different timelines and should not be conflated.

The 1 July 2027 commencement date for the CGT changes leaves roughly twelve months for the Treasury Laws Amendment Bill to clear the Senate, for draft regulations to be exposed for comment, and for businesses and their advisers to model outcomes under the new rules. That window is workable but not generous.

The interaction between the inflation-based discount mechanism and the 30 per cent minimum rate will be the technical crux for most practitioners. The precise methodology for calculating the inflation adjustment — whether it uses CPI from acquisition date or a rolling average, and how it applies to assets with mixed holding periods — will almost certainly require detailed ATO guidance before advisers can give reliable opinions. None of that guidance has been released yet.

Looking at what this means for transaction structuring: the increase in the active asset threshold to $10 million is a genuinely durable change for the cohort it reaches. For assets and taxpayers outside that expanded concession — larger private companies, investment properties held by individuals, listed equities — the reform as currently drafted is more disruptive. The flat 50 per cent discount was simple and predictable. Inflation-adjusted cost bases are neither, particularly in an environment where assets have been held for varying durations across a heterogeneous portfolio.

The government has bought down political risk with the 18 June package. Whether it has resolved the structural complexity for taxpayers outside the small business concession net is a separate question, and one the Senate crossbench is likely to test.