2026 Tax Reform: What the CGT Changes Mean for You
The Albanese Government has announced CGT concession details for small businesses and startups. Here's what PAYG employees need to know about novated leasing.
On 23 June 2026, the Albanese Government released further implementation details for its broader tax reform package — covering capital gains tax (CGT) concessions for small businesses and startups, income tax cuts for workers, and changes aimed at better aligning the tax treatment of labour and asset income. According to the Treasury Ministers media release, all 2.7 million active small businesses — covering 98 per cent of all active Australian businesses — will be eligible for the revised CGT concessions.
The headline item is CGT, but buried in the package is a continued commitment to cutting taxes for workers. That framing matters if you're a PAYG employee wondering whether the broader tax environment still makes salary packaging worth your time.
What this means for novated lease customers
Novated leasing works because of the way the Australian tax system treats employer-provided benefits and pre-tax salary deductions. When the government signals it is actively trying to better align the tax treatment of labour income — as it has in this reform package — the structural advantage of salary packaging arrangements like novated leases generally remains intact or improves. Nothing in this announcement changes the FBT rules that underpin novated leasing.
What is worth watching is the broader consultation process still underway. The government flagged in its Budget papers that consultation would continue, and a consultation paper has now been released. millarX will track any developments that affect FBT, salary packaging, or the electric vehicle FBT exemption and update this page accordingly. For now, the fundamentals that make a novated lease attractive for PAYG employees — pre-tax payments reducing your taxable income, potential savings on GST, and the EV FBT exemption — are unchanged.
If you run a small business or startup and are also an employee taking a salary, the expanded CGT concessions could interact with how you structure remuneration. That is a conversation for your accountant, not your novated lease broker — but it is worth having.
Common questions
Does the 2026 tax reform package change the FBT rules for novated leasing?
Based on the government's announcement, no. The reforms focus on CGT concessions for small businesses, income tax cuts, and aligning labour versus asset income treatment. The FBT framework that underpins novated leasing has not been flagged for change in this package.
Does the EV FBT exemption still apply?
Yes. The electric vehicle FBT exemption — which removes FBT on eligible battery electric and plug-in hybrid vehicles under the luxury car tax threshold — remains in place. This announcement does not alter it.
I'm a small business owner who also takes a salary. Should I consider a novated lease?
If you are a PAYG employee — even as a director drawing a salary — you may be eligible for a novated lease through your employer entity. The expanded CGT concessions announced are separate and relate to asset sales, not salary packaging. Speak to your accountant about how the two might interact for your situation.
What is the consultation paper about and how does it affect me?
The government has released a consultation paper as part of its post-Budget process. It is aimed at investors, small businesses, and startups. For most PAYG employees focused on novated leasing, the direct relevance is low right now — but millarX is monitoring the process for any downstream FBT or salary packaging implications.
How do I know if a novated lease is still worth it for me?
The core maths of a novated lease — pre-tax payments, GST savings on the vehicle purchase and running costs, and the EV exemption where applicable — have not changed. The best starting point is running your own numbers through a calculator or speaking with a licensed broker.