Tax Reform No. 3 Bill: What the Senate Committee Report Means for Property Investors
Senate committee report · Investor guide
Tax Reform No. 3 Bill: What the Senate Committee Report Means for Property Investors
A Senate committee has reported on the next batch of negative gearing and capital gains tax (CGT) legislation, the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026. The committee recommended that the bills be passed. The Senate has not voted yet, so the bill is not law. Nothing in the committee’s report changes the rules that are already in force.
Law and bill status as at: 13 November 2026·Last reviewed: 13 November 2026
General information only. This article is not tax advice.
Where things stand
- Already lawTax Reform No. 1 Act 2026The limit on negative gearing for residential property and the replacement of the 50% CGT discount, both starting 1 July 2027. Royal Assent 26 June 2026.
- Already lawTax Reform No. 2 Act 2026Spouse, co-owner and relationship breakdown rules. Royal Assent 26 August 2026.
- Still a billTax Reform No. 3 BillIt passed the House of Representatives on 29 October 2026 and has not passed the Senate.
- Senate has not votedSenate committeeThe Senate Economics Legislation Committee held hearings on 5 and 6 November 2026 and reported on 13 November 2026. Its recommendation is that the bills be passed.
The short version
Tax Reform No. 3 Bill in Plain English: The Short Version
Still a bill
The committee recommended that the bills be passed
The Senate has not voted yet, so the bill is not law.
Law unchanged
The committee report does not change the law
Nothing in the committee’s report changes the rules that are already in force. The start dates in the law that passed in June 2026 do not change whether or not the bill passes.
Still a bill
The “new residential dwelling” definition
The definition of a “new residential dwelling” decides which properties count as new for the negative gearing exemption. Industry groups asked for changes. The committee did not recommend any change to the definition. Coalition senators said they do not support it as proposed. We don’t know whether it will change.
Senate has not voted
What happens next
The Senate is scheduled to sit on 16 to 19 November and 23 to 26 November 2026. We don’t know when it will debate or vote on this bill.
Timeline
Tax Reform No. 3 Bill Timeline: From the Budget to the Senate Committee Report
Status as at 13 November 2026. It will change when the Senate votes.
Already law in the law that passed in June 2026Still a bill Tax Reform No. 3, not lawSenate has not voted not yet happened
- 12 May 20267:30pm (ACT time)Already law
Federal Budget cut-off
The cut-off for keeping negative gearing on an existing investment property is 7:30pm (ACT time) on 12 May 2026. - 26 June 2026Already law
Tax Reform No. 1 Act receives Royal Assent
The limit on negative gearing for residential property and the replacement of the 50% CGT discount, both starting 1 July 2027. - 14 October 2026Still a bill
Tax Reform No. 3 Bill introduced
The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 was introduced in the House of Representatives, together with a companion bill on a minimum tax for discretionary trusts. - 15 October 2026Still a bill
Referred to a Senate committee
The Senate referred the Tax Reform No. 3 Bill, and a companion bill on a minimum tax for discretionary trusts, to the Senate Economics Legislation Committee on 15 October 2026. - 29 October 2026Still a bill
Passed the House of Representatives
It passed the House of Representatives on 29 October 2026 and has not passed the Senate. - 5 and 6 November 2026Still a bill
Committee hearings
The committee received hundreds of written submissions and other documents and held public hearings on 5 and 6 November 2026. - 13 November 2026Still a bill
Committee report: pass the bills
The committee reported on 13 November 2026. Its recommendation is that the bills be passed. Coalition senators do not support passage of the bill as drafted. - Nextdate not knownSenate has not voted
The Senate has not voted
The Senate is scheduled to sit on 16 to 19 November and 23 to 26 November 2026. We don’t know when it will debate or vote on this bill.
The basics
What Is a Senate Committee Report?
What a committee does
When the Senate refers a bill to a committee, a small group of senators from different parties collects submissions, holds hearings and writes a report. The report tells the Senate what the committee thinks.
What it does not do
It does not change the law and it does not bind the Senate. The Senate still debates and votes on the bill, and the House of Representatives has to agree to any changes the Senate makes.
What was referred
The Senate referred the Tax Reform No. 3 Bill, and a companion bill on a minimum tax for discretionary trusts, to the Senate Economics Legislation Committee on 15 October 2026. The committee received hundreds of written submissions and other documents and held public hearings on 5 and 6 November 2026.
Committee and Coalition senators
What the Senate Committee Recommended, and What Coalition Senators Said
What the committee recommended
Recommends passage- The committee’s report contains one recommendation: that the bills be passed.
- It appears at the end of the committee’s discussion of the trust measures.
- The report does not make a separate recommendation about the negative gearing measures (Schedule 5) or the CGT adjustments (Schedule 4).
- For those schedules it records what submitters said.
- The committee’s reasoning deals with the trust measures. For Schedules 4 and 5 it records evidence and makes no finding.
- The committee noted Treasury’s evidence that further technical amendments will be required, in its discussion of the trust measures, and welcomed the Government’s commitment to keep consulting while they are developed.
What Coalition senators said
Do not support as drafted- Coalition senators do not support passage of the bill as drafted.
- Coalition senators added their own comments. They recommended that the Senate not support passage of the bill without removing the trust schedules (Schedules 1 to 3), and that the Government withdraw the legislation and present Schedules 4 to 6 as a separate bill.
- They said that should include a review of the definition of “new residential dwelling”.
- They also recommended a further Senate inquiry reporting no earlier than 30 March 2027.
What other senators said
Greens senators also added comments. Their recommendations are about the trust measures: they said the two trust bills should pass once an exemption for distributions to certain charities and not-for-profits is removed.
The evidence
What the Senate Committee Heard on Negative Gearing and CGT
Negative gearing (Schedule 5)
Schedule 5 of the bill would write the meaning of “new residential dwelling” into the tax law. At the moment the law leaves that to a ministerial instrument, and we could not find one on the Federal Register of Legislation as at 13 November 2026.
- Several submitters supported putting the definition in the law itself, including Chartered Accountants ANZ and the Real Estate Institute of Australia.
- The Housing Industry Association (HIA) said the proposed definition is “both too narrow and too subjective”. It asked for knock-down rebuilds, secondary dwellings, dual-key housing and substantial renovations that add housing capacity to be recognised.
- The Real Estate Institute of Australia, the Property Council and the HIA suggested running the 24-month window from first occupation rather than from the certificate of occupancy. Some suggested 36 months.
- The Real Estate Institute of Australia and the Property Council asked for an independent statutory review of the housing tax reforms after two years.
The committee did not recommend any change to the definition.
CGT (Schedule 4)
Schedule 4 deals with technical points in how the new CGT rules work, including for trusts and managed investment vehicles. The report says submitters welcomed these amendments as responsive to earlier consultation. Some points raised:
- Chartered Accountants ANZ and the Urban Development Institute of Australia asked the Government to release the remaining CGT rules, and the rules on how they interact with the minimum tax, well before the 1 July 2027 start date. The UDIA also asked for ATO guidance with worked examples.
- The bill would change how indexation works for individuals who are Australian residents for only part of the time they hold an asset and who make the gain directly. Indexation would be pro-rated by the number of days they were Australian residents. Someone who was a foreign or temporary resident for the whole period would still get no indexation. This is part of the bill, not law.
Law versus bill
What Is Law and What Is Still a Bill
Status at 13 November 2026.
| Item | Status at 13 November 2026 |
|---|---|
| Negative gearing limit for residential dwellings acquired after 7:30pm (ACT time) on 12 May 2026 that are not new residential dwellings and not otherwise exempt, from the 2027-28 income year | Law Tax Reform No. 1 Act 2026, Royal Assent 26 June 2026 |
| Cost base indexation and a 30% minimum tax replace the 50% CGT discount for gains that accrue from 1 July 2027, for Australian resident individuals and trusts. Gains that accrued before 1 July 2027 can keep the discount under transitional rules. New residential dwellings and affordable housing can keep the discount. | Law Tax Reform No. 1 Act 2026, Act No. 49, Royal Assent 26 June 2026 |
| Spouse, co-owner and relationship breakdown rules | Law Tax Reform No. 2 Act 2026, Royal Assent 26 August 2026 |
| Definition of “new residential dwelling” in the tax law, and exemptions for affordable housing, public housing, specialist disability accommodation, active build to rent, and retirement villages and residential care homes (for people who carry on the business, not passive investors) | Bill only Passed the House on 29 October 2026. Not passed the Senate |
| Second round of CGT adjustments (trusts, loss ordering, foreign and temporary residents) | Bill only |
| 30% minimum tax on discretionary trusts from 1 July 2028 | Bill only with a companion rates bill |
| Ministerial determination of the CGT apportionment method for assets held on 1 July 2027 | Not made A draft was released on 4 August 2026. We could not find a final instrument on the Federal Register of Legislation on 13 November 2026 |
For property investors
What the Tax Reform No. 3 Bill Means for Property Investors
This is general information, not advice for your situation. In plain terms:
Law unchanged
No change to the law yet
The committee report does not change the law. The start dates in the law that passed in June 2026 do not change whether or not the bill passes.
Already law
The 12 May 2026 cut-off
The cut-off for keeping negative gearing on an existing investment property is 7:30pm (ACT time) on 12 May 2026. If you signed a contract before then, that is treated as holding the property.
Still a bill
New residential dwelling
The definition of a “new residential dwelling” decides which properties count as new for the negative gearing exemption. Industry groups asked for changes, and Coalition senators said they do not support it as proposed. The committee did not recommend any change. We don’t know whether it will change.
Read the full guideNegative Gearing and CGT Changes: What Property Investors Need to KnowOur main guide sets out what is law and what is proposed in full.Open the main guide If renovation records are missingKoste’s CGT Cost Base ReportIndependent quantity surveying evidence of historical improvement costs for your accountant to consider.See the CGT Cost Base Report
What happens next
What Happens Next for the Tax Reform No. 3 Bill
- 1The Senate will decide whether to pass the bill, change it or reject it.
- 2If the Senate changes the bill, the House of Representatives has to consider those changes.
- 3A bill becomes law only after both Houses agree and it receives Royal Assent.
Where it stands today
Press reports suggest amendments are being discussed. When we checked on 13 November 2026, the Parliament’s bill page showed no Senate stages and no schedule of amendments agreed to. We will update this article when the Senate votes.
What to do now
What Property Investors Can Do Now
This is general information, not advice for your situation.
Check your contract date against 7:30pm (ACT time) on 12 May 2026
If you signed a contract before then, that is treated as holding the property.Thinking about a new build?
If you are thinking about buying a new build, ask your accountant to check the position when you sign and again before settlement.Keep good records
Good records help whatever the Senate decides: contract and settlement dates, renovation invoices, depreciation schedules and, for new builds, the builder’s documents and certificate of occupancy date.Watch the Senate
We will update this article when the Senate votes.Talk to a registered tax agent or financial adviser
Talk to a registered tax agent or financial adviser before you buy, sell or restructure.
CGT Cost Base Report
If renovation records are missing, Koste’s CGT Cost Base Report provides independent quantity surveying evidence of historical improvement costs for your accountant to consider. We provide evidence only. We do not calculate your tax and we do not provide valuations.
Prefer to talk it through? Call us on 1300 669 400.
Questions
Frequently Asked Questions About the Tax Reform No. 3 Bill
Has the Senate committee changed the negative gearing rules?
No. A committee report is a recommendation to the Senate. It does not change the law.
Is the Tax Reform No. 3 Bill law?
No. It passed the House of Representatives on 29 October 2026. The Senate has not voted on it.
Is the definition of a “new residential dwelling” settled?
No. The law that passed in June leaves it to a ministerial instrument, and we could not find one. The bill would write the definition into the tax law. The committee did not recommend changing it, and Coalition senators said they do not support it as proposed.
Do the CGT changes still start on 1 July 2027?
Yes, under the law already passed. The bill before the Senate adjusts how the rules work in some situations.
What did the Senate committee recommend?
The committee’s report contains one recommendation: that the bills be passed. The report does not make a separate recommendation about the negative gearing measures (Schedule 5) or the CGT adjustments (Schedule 4). For those schedules it records what submitters said. Because the recommendation is that the bills be passed, it covers the whole bill, including Schedules 4 and 5, and the committee did not recommend any amendments.
What did Coalition senators say about the Tax Reform No. 3 Bill?
Coalition senators added their own comments. They recommended that the Senate not support passage of the bill without removing the trust schedules (Schedules 1 to 3), and that the Government withdraw the legislation and present Schedules 4 to 6 as a separate bill. They said that should include a review of the definition of “new residential dwelling”. They also recommended a further Senate inquiry reporting no earlier than 30 March 2027.
When will the Senate vote on the Tax Reform No. 3 Bill?
The Senate is scheduled to sit on 16 to 19 November and 23 to 26 November 2026. We don’t know when it will debate or vote on this bill. The Senate will decide whether to pass the bill, change it or reject it.
What is a Senate committee report?
When the Senate refers a bill to a committee, a small group of senators from different parties collects submissions, holds hearings and writes a report. The report tells the Senate what the committee thinks. It does not change the law and it does not bind the Senate.
What should property investors do now?
Good records help whatever the Senate decides: contract and settlement dates, renovation invoices, depreciation schedules and, for new builds, the builder’s documents and certificate of occupancy date. Talk to a registered tax agent or financial adviser before you buy, sell or restructure. This is general information, not advice for your situation.
Important Information and Sources
Important. This article is general information about Australian tax law and bills as we understood them on 13 November 2026. It is not financial, tax or legal advice and does not take your objectives, financial situation or needs into account. Tax laws are complex and change. Get advice from a registered tax agent, accountant or financial adviser about your circumstances before making decisions. Koste’s tax depreciation schedules and CGT Cost Base Reports are quantity surveying evidence. We do not calculate your tax and we do not guarantee any tax outcome or saving.
Law and bill status as at: 13 November 2026 · Last reviewed: 13 November 2026
Koste Pty Ltd t/a Koste Chartered Quantity Surveyors · ABN 27 168 494 942 · 1300 669 400
Sources
- Senate Economics Legislation Committee, report on the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 (November 2026)
- Parliament of Australia: Tax Reform No. 3 Bill page
- Parliamentary Library Bills Digest 27bd024
- Parliament of Australia: Tax Reform No. 1 Bill page (now Act No. 49, 2026)
- ATO: Tax reform, boosting home ownership (last updated 29 June 2026)
- Treasury Laws Amendment (Tax Reform No. 2) Act 2026
Further reading on koste.ai: property tax changes knowledge hub and legislation updates.
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