Anthony Albanese to ditch 'widow's tax': Prime Minister makes ANOTHER change to the budget

By AIDAN WONDRACZ, ASSISTANT NEWS EDITOR, AUSTRALIA Published: 05:00, 25 June 2026 | Updated: 05:29, 25 June 2026 The Albanese government will amend its budget to ensure that investment properties will not lose their grandfathered exemptions to changes to capital gains tax and negative gearing if one of its owners dies or a couple divorces. Independent senator David Pocock led calls for Labor to amend the bill and ditch the 'widow's tax' to protect Australians.  Finance Minister Katy Gallagher confirmed on Thursday the legislation would be amended.  'We have made clear from the get-go, from the evening the budget was announced that we were aware that there would be tranches of legislation, … that would require us to work through some particular and specific interactions of tax law in subsequent legislation,' Gallagher said. 'So we were aware of some of the issues that Senator Pocock is raising around grandfathering and shared ownership, and we were working through them in the usual way, and we intend to address these, the arrangements for jointly owned assets in circumstances like inheritance, or divorce, in subsequent legislation.' The widow's tax would have impacted around 680,000 properties that had been bought before budget night on May 12. Pocock had sought amendments to ensure 'certain CGT (and negative gearing) concessions remain available where an… asset is transferred because of a family law court order or the death of a joint tenant'. 'It allows the transferee to choose to apply the same concession to a later capital gain that the transferee would have been entitled to apply immediately before the transfer,' he said. The Albanese government will amend its budget to ensure that investment properties will not lose their exemptions to capital gains tax and negative gearing if one of its owners dies or a couple divorces Pocock backed down from pushing ahead with the amendments himself, following the announcement by the Albanese government.  'I don't think this is ideal,' he said. 'This should have been sorted out in this primary legislation. The Senate should have had more time to actually look at these issues that we are identifying. 'However, I'm prepared to take the government's commitment in good faith and therefore will no longer proceed with the amendments.' The Albanese government has already committed to making several changes since it passed down its budget last month. Prime Minister Anthony Albanese will expand the number of small businesses eligible for capital gains tax exemptions. It had previously been limited to businesses with a turnover of $2million. That will now be $10million.  A loophole will also be closed that allowed people to buy property through self-managed super funds and access a capital gains tax rate of just 10 per cent. The widow's tax would have impacted around 680,000 properties that had been bought before budget night on May 12 (stock image) The change to super was made as the Albanese government struck a deal with the Greens in exchange for support from the minor party to pass its budget tax reforms.  'These changes don't in any way change the tax arrangements for superannuation, don't impact any existing SMSF borrowing arrangements and provide time to finalise arrangements that are in train,' the Albanese government said in a statement. 'Labor built superannuation and we'll always look to make it stronger and fairer, and agreeing to these changes will reduce the risks to retirement savings while also securing passage of these important reforms to make the tax system fairer.' Under the tax reforms, the government will scrap the existing 50 per cent CGT discount - replacing it with a new arrangement consisting of a 30 per cent flat tax and an inflation discount. Negative gearing rules will also be tightened, limiting the popular tax concessions to newly built properties and grandfathering all existing arrangements before May 12. The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.