Australia: Capital Gains Tax

Australia's foreign resident capital gains tax regime is undergoing its most significant expansion since 2006, with new rules commencing October 2026 that will fundamentally reshape how M&A transactions involving land-connected assets are structured and executed. The changes introduce a 365-day look-back test for determining whether shares or units constitute indirect Australian real property interests, broaden the definition of taxable Australian real property to capture energy, infrastructure and data-cen

Australia's proposed capital gains tax reforms will dramatically expand what constitutes taxable Australian real property for foreign investors, capturing previously exempt assets like solar farms and infrastructure. The most controversial aspect is the retrospective application dating back to 2006, potentially exposing foreign investors to unexpected tax liabilities on historical transactions they believed were compliant.

Australia's 2026-27 Budget delivers the most significant tax reform in 25 years, fundamentally reshaping property investment incentives through negative gearing restrictions and capital gains tax changes while navigating a global oil crisis pushing inflation toward 5%.