Start-Up CGT Discount, Monthly PAYG and an EV Phase-Down: Tax Reform No. 4 Clears the House

A wide-ranging tax bill aimed at start-ups, innovators and employers has moved quickly through the lower house. The Treasury Laws Amendment (Tax Reform No. 4) Bill 2026 was introduced on Tuesday 27 October and passed its third reading in the House of Representatives on Thursday 29 October, according to the Parliament’s bills register. It now needs to pass the Senate.

What the bill does

According to a summary of the bill published by the Institute of Financial Professionals Australia (IFPA), it has five main parts:

• Start-up investors: investors in eligible innovative start-up companies would get access to a 50% CGT discount and be exempt from the minimum 30% tax on capital gains for qualifying assets. An eligible company must broadly be Australian, incorporated for less than 15 years, unlisted, with aggregated turnover under $50 million, and meet “predominant activity” tests. Broad start date: 1 July 2027.
• R&D Tax Incentive: higher minimum and maximum expenditure thresholds, a higher turnover threshold for the refundable offset, higher offset rates and a lower intensity premium threshold. The refundable offset would be limited to entities in their first 10 years of carrying on an enterprise or since first registering for the incentive. Broad start date: 1 July 2028.
• Venture capital: the entity value cap for VCLP-eligible investees would rise from $250 million to $480 million, the ESVCLP equivalent from $50 million to $80 million, and the maximum committed capital for ESVCLPs from $200 million to $270 million. Start date: 1 July 2027.
• PAYG instalments: entities could choose to pay instalments monthly rather than quarterly or annually, and the Commissioner could require monthly instalments from an entity with a history of non-compliance, subject to a right of objection within 60 days. Applies to income years beginning on or after 1 July 2027.
• Electric cars and FBT: eligible electric cars provided under commitments made before 1 April 2027 would stay exempt; cars provided from 1 April 2027 to 31 March 2029 could access a 100% or 25% discount depending on base value; and from 1 April 2029, cars under new commitments would only access a 25% discount, depending on base value.

Alongside the trust tax

The House also passed the Tax Reform No. 3 Bill on 29 October, which contains the minimum 30% tax on discretionary trust income and the second tranche of CGT and negative gearing changes. IFPA reported that the No. 3 bills have been referred to the Senate Economics Legislation Committee, which is due to report by 13 November 2026.

What business owners should note

Three items are worth putting on the agenda with an accountant now. Founders and early investors should check whether their company could meet the eligibility tests for the start-up concession. Businesses claiming the R&D incentive should model how the new thresholds and the 10-year limit on the refundable offset would affect them from 2028. And employers with salary-packaged electric cars should note that the exemption is tied to when the commitment is made, with 1 April 2027 the key date.

None of this is law until the Senate passes the bill, and it may yet be amended.

Sources: Parliament of Australia bills register (ParlInfo); IFPA weekly bulletin, 26–30 October 2026. This article is general information only and is not tax advice.