Australian Budget Changes Target Capital Gains and Trusts

The Australian government introduced changes to the capital gains tax discount and negative gearing rules in last week’s budget. 2 billion by 2029-30. 2 billion in 2026-27 across the five largest states. The same report noted that such a decline would require an 80% drop in investor purchases of established homes.

The budget also included measures to limit tax advantages available through testamentary trusts. These trusts are used to divide assets after death and currently allow reduced tax rates on investment income for a small number of beneficiaries. The changes are grandfathered, meaning existing beneficiaries will not see immediate tax increases.

No tax is applied when assets are placed into the trusts.

Australia abolished estate duties in 1977 after Queensland removed them and other states followed. U.S. threshold set at $15 million. U.S. 5 billion. The government has not introduced an estate tax in the current budget.