Albanese Government Widens CGT Concessions for SMEs — What Self-Employed Borrowers Need to Know

Albanese Government Widens CGT Concessions for SMEs — What Self-Employed Borrowers Need to Know

The Albanese government has confirmed widened capital gains tax (CGT) concessions for small and medium enterprises (SMEs), marking a significant concession following sustained pushback from the business community, accounting associations, and property industry bodies.

For Australia's self-employed borrowers — many of whom also hold business assets or investment properties — this development has direct implications for both tax planning and lending capacity.

What the Government Has Announced

After weeks of criticism over proposed changes to the CGT framework, the federal government has widened the CGT concessions available to eligible SMEs. The changes include carve-outs that protect qualifying small businesses from the full impact of the proposed CGT adjustments. The government has also trimmed its proposed tax powers in the area, according to reporting from The Adviser and Australian Broker.

Full legislative details are still being finalised, but the direction is clear: eligible small businesses will face a materially lower CGT burden than originally proposed under the reform package.

Why This Matters for Self-Employed Borrowers

For self-employed Australians, capital assets — whether business equipment, commercial property, or investment real estate — often form the core of both their business value and their borrowing capacity.

When lenders assess a self-employed applicant's serviceability, they look beyond take-home income. Business assets, property holdings, and overall net financial position all feed into the assessment. A more favourable CGT treatment means:

• Lower tax liability on asset sales, preserving more capital within the business
• Stronger incentive to hold assets longer, which builds balance sheet strength
• More positive accountant assessments of business financial health, which directly supports Alt Doc loan applications

For those seeking Alt Doc loans — where BAS statements and accountant letters substitute for traditional payslips — the improved CGT environment may translate into more robust income certifications and stronger net asset assessments from accountants.

The Lending Angle

Non-bank lenders like MPFG Capital have long understood that self-employed borrowers' financial situations cannot be assessed through the same lens as salary earners. The Alt Doc loan is designed precisely for this reality.

Under MPFG Capital's Alt Doc product, borrowers can substantiate income using:

• BAS statements (typically 12 months)
• Accountant letters confirming income and business viability
• Business bank statements

A stronger overall financial position — driven in part by reduced CGT exposure on business and investment assets — feeds directly into the income verification picture that accountants present on behalf of their clients.

What Self-Employed Borrowers Should Do Now

If you are a self-employed Australian with business or investment assets, the widened CGT concessions are worth reviewing with your accountant before your next lending assessment. Specifically, consider:

1. Review your asset disposal timeline — lower CGT on future sales may affect when you choose to realise gains
2. Update your accountant letter — if your business asset position has strengthened, ensure this is reflected in your income certification
3. Reassess your borrowing capacity — with a stronger balance sheet, your overall lending profile may have improved

If you have previously been declined by a major bank due to income documentation challenges, MPFG Capital's Alt Doc loan offers an alternative pathway that assesses the full picture of your financial position.

A Broader Policy Shift

This CGT concession is part of a broader government recognition that small business owners require different treatment to wage earners — both in tax policy and, increasingly, in lending policy. Non-bank lenders have been operating on this principle for years. As regulatory and legislative frameworks increasingly reflect the realities of self-employment, the case for alternative documentation lending only strengthens.

This article is for general information purposes only and does not constitute financial or tax advice. Individual tax and lending outcomes depend on your specific circumstances. Please consult a qualified accountant and licensed finance broker before making any decisions.