Australia softens impact of capital gains tax reform on small businesses after backlash

SYDNEY - The Australian government, in a major turnaround, announced on Thursday changes to its capital gains tax overhaul after critics warned the planned reforms would stifle small businesses.

• Under reforms unveiled in last month's budget, a 30% minimum tax on net capital gains (CGT) will be introduced from July 2027, but industry groups had argued the change would reduce incentives to invest in and grow businesses.

• Some exemptions exist, allowing businesses to access a 50% discount on the CGT on assets held for more than 12 months.

• The government is now raising the turnover threshold for small businesses to be eligible for the discount to A$10 million ($7 million) from A$2 million.

• "We back Australian small businesses and the important role that they play in Australia," Prime Minister Anthony Albanese said.

• Albanese said 2.7 million active small businesses in the country would be eligible for the discount.

• The government would also introduce a new "innovative business tax concession" for start-ups, he said.

($1 = 1.4239 Australian dollars)

(Reporting by Christine Chen and Alasdair Pal in Sydney; Editing by Edwina Gibbs)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 17, 2026 at 9:51 PM.