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ARTICLE · 10 APRIL 2026

Significant And Retrospective CGT Changes For Taxable Australian Property: Draft Legislation Released

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The Australian Government has released draft legislation proposing significant and retrospective changes to foreign resident capital gains tax rules, dramatically expanding what constitutes taxable Australian real property. These changes will apply to past transactions dating back to 2006, existing investments, and future deals, with only limited transitional relief for renewable energy assets until 2030.

AustraliaTax
Luke Imbriano
Luke Imbriano
Cameron Blackwood
Cameron Blackwood
Angelina Lagana
Angelina Lagana
Rhys Jewell
Rhys Jewell
Simon Mifsud
Simon Mifsud
Simon Clark
Simon Clark
Nathan Unitt
Nathan Unitt
Phoebe Maus
Phoebe Maus
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On 10 April 2026, the Australian Government released draft legislation and explanatory material for its proposed changes to the foreign resident capital gains tax (CGT) regime (which was first announced as part of 2024-25 Australian Budget). Whilst the Government is describing the changes as merely giving effect to the “well understood intention” of the rules as originally introduced, we consider the changes significantly expand the circumstances in which foreign investors will be subject to CGT in Australia and increase Australia’s sovereign risk as a destination for foreign capital. These changes will apply to past, existing and future transactions, including matters currently before the courts. Transitional relief will only be offered for a limited class of renewable energy assets, and only until 2030. Below we walk through the breadth of the proposed changes and their retrospectivity.

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