{"id":"BILL-r7492","name":"Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026","slug":"income-tax-rates-amendment-tax-reform-no-1-bill-2026","collection":"bill","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":462403,"registerId":"commonwealth-BILL-r7492-current","compilationNumber":null,"startDate":"2026-05-28","status":"before_reps","reasons":null,"registeredAt":null},"sections":[],"analysis":{"summary":{"status_summary":"Introduced in the House of Representatives on 28 May 2026, second reading moved, and referred to the Senate Economics Legislation Committee with a report due by 22 June 2026.","complexity_score":4,"likely_questions":["How is the extra income tax on capital gains calculated under this bill?","Does the minimum 30 per cent tax apply to capital gains from property I bought before 1 July 2027?","Who is exempt from paying the minimum tax on capital gains?","How does this bill interact with the changes to negative gearing and the CGT discount?","What do I need to do if I receive capital gains through a trust?"],"complexity_factors":["The bill itself is a single section with a formula, but its operation depends on the extensive definitions and calculations in the main Treasury Laws Amendment Bill.","Understanding the minimum tax gap amount requires working through a multi-step method statement involving taxable income, basic income tax liability, and the minimum tax capital gain.","Interaction with other changes: cost base indexation, new asset categories (residential vs non-residential, deferred gains), and quarantined negative gearing amounts.","Trustee reporting obligations and the choice between indexation and CGT discount for new dwellings and affordable housing add complexity for affected taxpayers."],"plain_english_summary":"This bill, the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026, is a companion piece to the larger Treasury Laws Amendment (Tax Reform No. 1) Bill 2026. Its sole purpose is to set the rate at which extra income tax is imposed on a taxpayer's 'minimum tax capital gain' - a new concept introduced by the main bill. The rate is defined by a formula: the taxpayer's 'minimum tax gap amount' divided by their 'minimum tax capital gain' (both in whole dollars). This extra tax is designed to ensure that Australian resident individuals pay a minimum effective rate of 30 per cent on capital gains that accrue after 1 July 2027, regardless of their marginal tax rate in the year of realisation.\n\nThe minimum tax only applies to gains on assets held after 1 July 2027 (excluding deferred gains from assets held before that date). It does not apply to companies, superannuation funds, or foreign residents. Certain income support recipients - such as Age Pension or JobSeeker recipients - are exempt, as are gains from new residential dwellings or affordable housing if the taxpayer chooses to apply the existing CGT discount instead of indexation. The government states this measure reduces incentives to defer capital gains realisations until low-income years, making the tax system fairer and funding tax cuts for workers. However, the official materials do not provide independent evidence that tax deferral behaviour will substantially change or that housing affordability will improve as a result.\n\nThe mechanical effect is straightforward: the bill inserts a new section 12AA into the Income Tax Rates Act 1986. But its practical impact depends entirely on the complex rules in the main bill, including the calculation of the minimum tax gap amount (a seven-step process involving taxable income and tax liability calculations). Individuals who sell assets after 1 July 2027 will need to compute both their indexed capital gain and the additional top-up tax if their effective rate falls below 30 per cent. Trusts must provide beneficiaries with detailed information so they can calculate their own liability. The Treasury estimates compliance costs for the combined CGT and negative gearing changes at $88.4 million per year over ten years.\n\nThe bill is currently before the House of Representatives. Introduced on 28 May 2026, it had its second reading moved the same day and has been referred to the Senate Economics Legislation Committee, which is due to report by 22 June 2026. No amendments have been circulated. The official materials note that this is the first tranche of CGT reforms, with further complex interactions to be addressed in subsequent legislation."}},"importantCases":[],"_links":{"self":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026","history":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026/history","analysis":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026/analysis","conflicts":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026/conflicts","importantCases":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026/important-cases","documents":"/api/acts/income-tax-rates-amendment-tax-reform-no-1-bill-2026/documents"}}