Arabic version: العمال يقترح معالجة لقواعد الخصم الضريبي على خسائر الإيجار في حالات الإرث

According to ABC News, Labor has released draft legislation intended to preserve negative gearing access for Australians who inherit an investment-property stake from a spouse. The proposal addresses an unintended effect of the government’s tax overhaul, dubbed the “widow tax”, which could have resulted in less favourable treatment for widowers, divorcees and domestic violence victims.

Labor’s budget changes restricted negative gearing to newly built homes, while grandfathering existing investment properties owned before May 12. Australians purchasing established homes after budget night would no longer be able to use rental losses to reduce tax on other income from July 2027. Under the draft changes, the negative gearing treatment applying before a spouse’s death would follow an inherited property interest. The same approach would apply to property transferred through divorce or separation.

ACT senator David Pocock, who raised concerns about the issue, said the earlier outcome would “disproportionately negatively impact women”. He welcomed the exposure draft, saying it appeared to address “many of the most urgent concerns” with the bill, while stressing that the timing of passage mattered so lenders could consider preserved benefits in loan serviceability decisions.

The government is also consulting on measures affecting new, affordable and disability housing. A home could remain classified as new for up to 24 months after its occupancy certificate is issued, allowing a buyer within that period to retain negative gearing benefits. Proposed carve-outs would cover homes used for NDIS specialist disability accommodation, eligible community-provider affordable housing, public housing and qualifying build-to-rent developments. Draft rules also offer a formula for dividing capital gains between the old system and the proposed indexed model for certain assets.

Public consultation is open until August 21. Treasurer Jim Chalmers said the draft material was designed to ensure the reforms applied appropriately across specific taxpayer circumstances and structures, with further tranches of legislation still being finalised. Acting Opposition Leader Jane Hume said Labor was “still trying to clean up a mess of its own making” and that the Coalition would examine any future legislation carefully.