Capital gains tax reforms – arrangements for innovative start-ups

The government is proposing changes to capital gains tax (CGT) for investments in start-ups.

These changes aim to support investment in innovative businesses.

We want your feedback on a new Innovative Business CGT Concession.

Key questions

• Does the concession help attract investment to innovative start-ups?

• Do the 10-year age limit and $50 million turnover cap target the right businesses?

• What conditions should apply to extend the age limit to 15 years for sectors that take longer to commercialise (like biotech, medtech or deep tech)?

• Are the innovation criteria appropriate?

• Is the 5-year holding period appropriate for long-term investment?

• Is the $10 million lifetime cap set at the right level?

• Do the transition rules for shares issued before 30 June 2027 work well?

Background

In the 2026–27 Budget, the government announced changes to CGT.

It will replace the 50 per cent CGT discount with:

• cost base indexation

• a 30 per cent minimum tax rate.

These changes will apply from 1 July 2027.

As announced in the 2026–27 Budget, the government is consulting on how these changes apply to start-ups.

Your feedback will guide future tax law changes.

You can find more detail in the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Explanatory Memorandum, and the negative gearing and CGT reform explainer.