Capital gains tax (CGT) is back in the spotlight after the CEO of the Commonwealth Bank of Australia publicly supported proposed changes to the CGT discount for property investors. While the discussion is still at the policy level, it has already sparked debate among business leaders, economists, and property investors.

At the same time, former Treasurer Joe Hockey has added his voice to the conversation—supporting some housing tax reforms while criticising broader CGT changes.

For Australian business owners, property investors, and high-income earners, this debate is more than political commentary. It signals potential shifts in how investment income, property gains, and business profits may be taxed in the future.

In this blog, we break down what was said, what it could mean, and what individuals and businesses should start thinking about now.

What Happened?

The CEO of the Commonwealth Bank of Australia (CBA), Matt Comyn, has publicly supported changes to Australia’s capital gains tax system, particularly around the CGT discount applied to investment assets.

His comments highlight a few key points:

• He supports reducing or adjusting the CGT discount
• He believes there is a distinction between:
  • Passive investment (e.g., property holding)
  • Productive investment (e.g., startups, business growth, innovation)
• He suggested that reforms could be “cleaner” if focused only on housing assets
• He also raised concerns about maintaining incentives for entrepreneurship and risk-taking

In parallel, Joe Hockey, former Treasurer, supported changes to negative gearing on existing properties but criticised broader CGT changes, calling them a policy mistake.

Importantly, these are opinions and policy discussions, not confirmed law changes.

Why This Matters for Australians

Even though no final legislation has been passed, discussions at this level matter because they often signal where tax policy may be heading.

If CGT rules were adjusted, it could affect:

• Property investors
• Small business owners selling assets
• Start-up founders and early-stage investors
• High-income earners with investment portfolios
• Anyone relying on long-term capital growth strategies

Tax policy changes often aim to balance three things:

• Housing affordability
• Government revenue
• Economic productivity and investment incentives

However, changes in one area can significantly impact behaviour in others.

Understanding Capital Gains Tax (CGT) in Simple Terms

Capital gains tax applies when you sell an asset for more than you paid for it. This includes:

• Investment properties
• Shares and managed funds
• Business assets
• Some other investment structures

In Australia, individuals may currently receive a 50% CGT discount if they hold the asset for more than 12 months.

This discount is designed to encourage long-term investment rather than short-term speculation.

The current debate is around whether this discount should be:

• Reduced
• Restructured
• Or limited to certain asset classes (such as housing only)

Potential Policy Direction: What’s Being Discussed?

Based on recent commentary, there are a few possible directions policymakers may consider:

1. Reducing the CGT Discount

This would increase taxable capital gains for investors selling assets.

2. Limiting CGT Changes to Property Only

This approach would focus reforms on real estate rather than shares or business investments.

3. Introducing Differentiated Rules

Some proposals suggest different tax treatment depending on whether the investment is:

• Passive (e.g., rental property)
• Active (e.g., startup or business investment)

4. Maintaining Incentives for Innovation

There is concern that overly broad changes could discourage investment in startups and productive industries.

Again, none of these are confirmed policy outcomes at this stage.

Who Should Pay Attention?

This discussion is relevant for:

Property Investors

Changes to CGT could directly impact after-tax returns on investment properties.

Small Business Owners

Business asset sales, restructures, or exits could be affected.

Start-up Founders & Investors

Policy may differentiate between passive and high-risk innovation capital.

High-Income Individuals

Those relying on investment portfolios may see changes in long-term tax planning.

Accountants & Advisors

Tax planning strategies may need adjustment depending on policy direction.

Possible Tax and Business Implications

If CGT changes are introduced, potential impacts could include:

1. Higher Tax on Asset Sales

Investors may retain less profit after selling assets.

2. Changes in Investment Behaviour

People may:

• Hold assets longer
• Shift investment strategies
• Rebalance portfolios

3. Impact on Property Markets

Investor demand could shift depending on how property gains are taxed.

4. Business Exit Planning

Owners planning to sell businesses may need to reassess timing and structure.

5. Greater Importance of Tax Structuring

Trusts, companies, and holding structures may become more relevant in planning.

What Should Business Owners and Investors Do Now?

Even though nothing has changed yet, preparation is key.

1. Review Your Asset Structure

Understand how your assets are currently held and taxed.

2. Assess Future Exit Plans

If you plan to sell property or a business, timing may matter.

3. Monitor Policy Updates

Tax changes often evolve over months or years before implementation.

4. Avoid Reactionary Decisions

Do not restructure investments based on speculation alone.

5. Seek Professional Advice Early

Tax planning becomes more effective when done proactively.

Common Mistakes to Avoid

• Assuming commentary equals law change
• Selling assets based on headlines
• Ignoring CGT implications in long-term planning
• Not reviewing investment structures regularly
• Overlooking tax on business exits or restructuring

Frequently Asked Questions (FAQs)

1. Has the CGT law changed in Australia?

No. The current discussion reflects policy opinions, not enacted law.

2. What is capital gains tax?

CGT is tax paid on profit from selling an asset.

3. Does CGT apply to my home?

Generally, your main residence is exempt, but exceptions may apply.

4. What is the CGT discount?

It is a 50% reduction on capital gains for assets held over 12 months (for individuals).

5. Are investment properties affected?

Yes, investment properties are commonly subject to CGT.

6. Could CGT changes affect small businesses?

Yes, especially when selling business assets or restructuring.

7. Should I sell my investment property now?

This depends on your personal situation—professional advice is essential.

8. Will startups be affected?

There is a discussion about protecting productive investments like startups.

9. Do CGT changes happen often?

Tax reforms are gradual and usually take time to implement.

10. How can I reduce CGT legally?

Through proper structuring, timing, and tax planning strategies.

11. What should investors do right now?

Monitor changes and ensure tax planning is aligned with long-term goals.

Final Thoughts

The conversation around capital gains tax is not new, but it is gaining momentum again as influential voices in banking and government weigh in on potential reform.

While no immediate changes have been confirmed, the direction of discussion suggests that CGT, property investment taxation, and investment incentives will remain key topics in Australia’s economic policy landscape.

For individuals and businesses, the key takeaway is simple: tax policy changes are most effective when you prepare early, not react late.

Speak With a Tax Expert About CGT Changes and Your Investment Strategy

Capital gains tax discussions show how quickly Australia’s tax and investment landscape can change. Even proposed reforms can affect decisions around selling assets, restructuring, and timing.

While no laws have changed, understanding your tax position is important to avoid costly mistakes.

At Latitude Accountants, we help individuals and businesses with CGT, structuring, and tax planning.

If you’re unsure about the impact on your situation, professional advice can help you plan confidently.

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📞 1300 706 597
📧 info@latitudeaccountants.com.au

Disclaimer

This article is general information only and does not constitute financial, tax, or legal advice. Tax laws may change, and outcomes depend on individual circumstances. Seek advice from a qualified professional before making financial decisions.