Australia raises small business tax discount threshold to A$10 million

Key facts

• Australia is modifying its capital gains tax overhaul to ease the budget's impact on businesses.
• The turnover threshold for small businesses to access a 50% capital gains tax discount has been raised to A$10 million from A$2 million.
• A new tax concession for start-ups will be introduced.
• The reforms are set to take effect from July 2027.

The Australian government has reversed course on aspects of its planned capital gains tax (CGT) overhaul, raising the turnover threshold for small businesses to qualify for a 50% discount on assets held for over 12 months to A$10 million, up from A$2 million. This change, effective from July 2027, aims to alleviate concerns from industry groups that the original reforms would stifle investment and growth. Prime Minister Anthony Albanese stated that 2.7 million active small businesses would benefit from the increased threshold. Additionally, a new tax concession for start-ups is being introduced.