ODIN Tax, the registered tax agent practice within ODIN, says the tax reform that became law in June 2026 will change less for Australian expats than national headlines suggest. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed Parliament on 25 June 2026 and received Royal Assent on 26 June 2026. From 1 July 2027, it replaces the 50% capital gains tax discount for individuals, trusts and partnerships with cost-base indexation and a 30% minimum tax rate on gains, and limits the offset of rental losses against Australian wage or salary income to newly built properties. Any property held before Budget night (7:30pm AEST on 12 May 2026) is grandfathered. For Australians who are non-residents for tax purposes, ODIN Tax says both headline measures matter less than they appear, because the benefits most reporting describes as ending were removed for non-residents years ago.
Two changes drive most of the coverage: the removal of the 50% CGT discount and the tightening of negative gearing. Neither lands the way the headlines imply for non-residents. The full 50% discount has not applied to non-residents since 2012. The main residence exemption was removed for non-residents on sales after 30 June 2020. So for ODIN’s non-resident clients, the reform does not take away benefits they still hold. It changes how gains are calculated and taxed on disposals from 1 July 2027 onward.
The 30% minimum tax rule is aimed mainly at Australian tax residents whose gains might otherwise be taxed below 30% because of factors such as low other income or tax offsets. It is less central for non-resident expats, who are already taxed on Australian-sourced taxable income from the first dollar starting at 30%.
“For a non-resident expat, the two measures most people think are ending, the 50% discount and the main residence exemption, are not what changes here. Those were removed years ago,” said Pau Lam, Tax Director and registered tax agent at ODIN Tax. “The discount has not applied to non-residents since 2012, and the main residence exemption was removed for non-residents on sales after 30 June 2020. The real question for our clients is how the new indexation and 30% minimum tax affect gains they make from 1 July 2027, and how that interacts with their residency across what the Budget refers to as the testing period.”
On negative gearing, the change is narrower than the headline. From 1 July 2027, rental losses can be offset against Australian wage or salary income only for new builds. Losses on established property bought after Budget night are quarantined to that property. They still reduce that property’s rental income and lower the capital gain on sale, but they cannot offset other income such as salary. Any property held before Budget night is grandfathered, so losses associated with the property can still offset Australian wages or salary income in the future.
“For most of our clients this is far less dramatic than the headlines suggest,” said Steven Lee, Mortgage Director at ODIN. “A non-resident with no Australian salary to offset can still negatively gear an established property much as before. The loss stays with the property, reducing its rental income now and the capital gain when they sell. It only bites if you plan to return to Australia and expected to offset those losses against an Australian salary, because from 1 July 2027 that wider benefit is reserved for new builds. Anyone choosing between established and new should model it against their own plans.”
Because the reforms do not commence until 1 July 2027 and pre-Budget-night holdings are grandfathered, ODIN says expats have a defined planning window rather than an immediate change. It is most relevant to those weighing an established versus a new-build purchase, those who may return to Australian employment income, and anyone timing a sale across the 1 July 2027 boundary.
ODIN Tax notes that some details of how the new regime applies to non-residents are still being clarified as the law is implemented, and is advising expat clients to seek tailored advice on their specific residency and CGT position rather than act on the headline measures alone.
All personal tax outcomes depend on individual circumstances, including residency status, the nature and timing of the asset, and applicable tax treaties. This release contains general information only and does not constitute personal tax or financial advice. Readers should seek advice from a registered tax agent.
About ODIN
ODIN is a specialist provider of mortgage, tax, and conveyancing services for Australian citizens, permanent residents, and foreign investors living overseas. ODIN Tax is its registered tax agent practice, specialising in cross-border capital gains tax, residency, and compliance for Australian expats across more than 40 countries. ODIN Mortgage, regulated under ASIC and the National Consumer Credit Protection Act (NCCP), provides home loan and investment property finance for expats using foreign income. ODIN is headquartered in Hong Kong.
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