$1,000 Instant Tax Deduction – Exposure Draft
The Australian government has released a draft bill that would create a new $1,000 standard deduction for work-related costs starting in the 2026–27 income year. This measure is meant to make it easier for Australian tax residents who earn taxable labour income to follow the rules. This plan would let people who qualify take a standard deduction of up to $1,000, but only if it is less than $1,000 or their total taxable labour income. To make sure that taxpayers don’t get two benefits, the deduction is lowered by any work-related expense deductions claimed. If the total amount of eligible deductions is more than $1,000, the standard deduction won’t apply. Instead, taxpayers will have to list their actual expenses.
Certain deductions remain outside the scope of the standard deduction and can be claimed separately. These include expenses not related to labour income, for instance, interest deductions, as well as specific deductions such as donations or gifts, income protection insurance premiums, tax agent fees, and union or professional association fees.
From 1 July 2026, depreciating assets will no longer be eligible for low-value pooling. However, where a balancing adjustment event occurs, and the taxpayer has claimed the standard deduction during the asset’s effective life, the balancing adjustment amount may be reduced by 50%.
For FBT purposes, where an expense payment fringe benefit lies within the scope of the standard deduction and is provided through a salary packaging arrangement, the “otherwise deductible” rule will not apply. As a result, employers will be subject to FBT on the full taxable value. The exemption for eligible work-related items under section 58X will be limited to non-salary packaged benefits, and the restriction on substantially identical items within the same FBT year will be removed. The new standard deduction will replace the existing $300 no-receipts threshold and the $150 laundry concession, with the relevant provisions in Division 900 to be repealed.
Strengthening the foreign resident capital gains tax regime – draft legislation
The Government has released draft legislation proposing changes to boost the capital gains tax (CGT) rules for foreign residents. The definition of taxable Australian real property (TARP) will be clarified and expanded to include assets that have a close economic connection to Australian land and natural resources. In addition to existing mining, prospecting rights, and quarrying, TARP will now also cover water entitlements over Australian water resources and rights or options to obtain TARP assets.
The definition of real property will be clarified to include interests over land, things attached to land, and licences and leases, applied consistently irrespective of how the territory or state law treats the interest. Some of these amendments will apply to CGT events from 2006, when Division 855 was first enacted.
The existing point-in-time test for determining indirect Australian real property interests (IARPI) will be replaced with a 365-day look-back test. Under this new test, membership interests will be considered IARPI if the principal asset test is satisfied at any point during the 365 days before the CGT event.
Superannuation Advertising Ban – Exposure Draft
The Government has issued exposure draft regulations to support the new laws banning the advertising of certain superannuation products to new employees during onboarding. On 26 March 2026, the underlying legislation received Royal Assent. The draft regulations add a new regulation 7.8.26 to the Corporations Regulations 2001 and are proposed to start on January 1, 2027, six months after the legislation takes effect on 1 July 2026. The regulations mention the conditions that need to be satisfied when advertising a MySuper product during the onboarding process.
TPB Sanctions Reforms
The Government has issued draft legislation that would give the Tax Practitioners Board stronger regulatory powers and sanctions. The draft legislation proposes to:
- Introduce criminal penalties for non-registered tax return preparers
- Increase the maximum amounts for civil penalties
- Allow infringement notices for alleged breaches of some civil penalty provisions
- Allow enforceable voluntary undertakings
- All contingent and interim suspensions of registration in certain circumstances
- Introduce new civil penalties for:
- Breaches of the code of professional conduct by registered tax practitioners
- Misleading or false statements by non-registered preparers
- Extend the maximum time period before a terminated practitioner can reapply for registration from 5 years to 10 years.