Finance minister Katy Gallagher, with Prime Minister Anthony Albanese and treasurer Jim Chalmers.

CONTROVERSIAL changes to capital gains tax and negative gearing are set to pass the Senate, with Labor and the Greens announcing they have struck a deal this morning.

The Government sparked plenty of concern in handing down its budget earlier this year, when it announced it was going to wind up a 50pc concession on capital gains tax for both businesses and investment properties.

In today’s deal, the Greens said the support for the bill was contingent on adding a change to not allow self-managed super funds to borrow money to buy residential investment properties.

“The Government has agreed to support an amendment that will be moved by the Greens to ban future limited recourse borrowing arrangements (LRBAs) for residential property by superannuation funds,” the Government said in a statement.

“Superannuation funds are generally prohibited from borrowing money to invest, with the exception of LRBAs that are used by SMSFs.”

Farming groups claim win for small businesses

While agriculture has largely been carved out of the changes, there was concern about the turnover threshold of small businesses.

But farming groups earlier this week claimed a win with the Government changing lifting the threshold from $2 million to $10m.

NSW Farmers President Xavier Martin said the move was a welcome signal the Government had been listening to sector concerns by enabling them to access concessional CGT rates if their turnover is less than $10 million or their net assets were under $6m.

“A lot of NSW farmers will welcome this with considerable relief. Updating the threshold recognises the scale, cost and capital intensity of agriculture today,” Mr Martin said.

“CGT doesn’t land in isolation – it lands on top of fuel, fertiliser, finance, regulatory and wage pressures already compressing farm businesses. This change matters.”

Mr Martin said the critical test for the full package of reforms remained intergenerational farm transfer, with the minimum 30pc tax on inflation-adjusted gains still an issue for some farms looking to pass on the keys after 1 July 2027.

“Farming is a long-term, intergenerational business. The question is whether these changes make it easier to pass a farm to the next generation – that’s the measure we’ll apply before congratulating the Government,” he said.

NSW Farmers acknowledged the Treasurer’s commitment to consult with small businesses on the final design of the reforms and would engage constructively through that process.

“This is what constructive engagement looks like – and we intend to hold the Government to that standard as the detail is worked through,” Mr Martin said.

“Farmers have spoken with one voice on this. The threshold has moved. Now we need to make sure the full system supports continuity for the next generation.”