The Albanese government has delivered more of our ambitious tax reform agenda with the second tranche of legislation passing the Senate today.
These reforms deliver billions of dollars in support for business to encourage productive investment and sensible risk taking.
This is great news for small businesses across the country and will help drive investment, innovation and resilience across the economy.
This legislation delivers on two more of the government’s $3.8 billion in new measures that lower taxes for businesses and start‑ups.
The legislation also includes the further implementation details we flagged at the outset of the tax reform process, providing certainty for people who acquire an interest in property as a result of inheritance or relationship breakdown.
We said we’d address these issues and we’ve delivered on that today.
The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 reintroduces loss carry‑back for companies for tax years starting on or after 1 July 2026.
Loss carry‑back enables eligible companies to offset a loss against tax paid up to two years earlier, generating a refundable tax offset.
This will deliver more help to 85,000 mostly small businesses, supporting productive investment and sensible risk‑taking and providing timely cash flow support to bolster resilience as well.
The Bill also makes the $20,000 small business instant asset write‑off permanent from 1 July 2026.
The Albanese government has now delivered certainty to small businesses who have for too long had to wait to see if the Parliament would extend the instant asset write off each year.
All 2.7 million active small businesses with turnover of less than $10 million stand to benefit.
This will reduce compliance costs for small business by around $32 million per year and provide the certainty small businesses need to invest with confidence.
The Bill builds on the legislation to reform negative gearing and capital gains tax passed in June.
It ensures a property owned on Budget night will retain access to negative gearing in certain circumstances.
The provisions in the Bill ensure an individual can retain this treatment for an ownership interest in a property where:
- the property was acquired from a spouse through an inheritance or relationship breakdown; or
- someone inherits part or all of a property in which they already had an ownership share.
They also ensure new builds will retain access to negative gearing and concessional capital gains tax treatment in the same circumstances.
The Government released drafts of these amendments on 4 August for consultation, reflecting our intention to consult on the more complex aspects of these reforms.
Legislating significant reforms in tranches is a standard approach, and we’ll continue to deliver more tranches of reform in the coming months, consistent with past reforms such as the GST and other major changes.
Our reforms are all about making our economy work in the interests of more Australians, businesses and future generations, delivering more support for small business, more tax cuts for workers, and making it easier for Australians to buy their first home.
