What is Changing

As part of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026, introduced to Parliament on 2 July 2026, the Government has included a time-limited 50% CGT discount for eligible foreign corporate investors disposing of Australian renewable energy assets until 30 June 2030. The concession applies from the Bill’s commencement date being the first 1 January, 1 April, 1 July or 1 October to occur after Royal Assent. If the Bill passes during the August 2026 sitting period, it could allow commencement as early as 1 October 2026. It is designed to sit alongside the broader foreign resident CGT tightening measures in the same Bill, providing a targeted incentive to offset the increased compliance burden and encourage foreign capital into Australia’s renewable energy sector during a critical period of the energy transition.

Why the Change

The renewable energy concession responds to a structural challenge in financing Australia’s energy transition: the difficulty of attracting long-term foreign institutional capital into renewable energy infrastructure at the scale required to meet Australia’s net-zero commitments. By improving after-tax returns on secondary market transactions involving operating renewable assets, the Government aims to increase liquidity in the renewable energy investment market and encourage reinvestment of capital into new projects. The concession complements the Government’s broader NEM reform agenda, the Consumer Energy Resources National Technical Regulator, and the AER funding announced in the 2026-27 Budget, all of which are aimed at accelerating the transition to renewable energy supply.

Who is Impacted and How it Works

Who qualifies

The 50% CGT discount is available only to foreign corporate investors, which include foreign companies and foreign trusts. Foreign individuals are expressly excluded. This means the concession is primarily relevant to foreign infrastructure funds, institutional investors, and corporate groups with Australian renewable energy holdings.

What assets qualify

Eligible assets include solar farms, wind farms, hydroelectric infrastructure, and battery storage systems. Pre-development or development-stage projects can also qualify, but only where there is objective evidence of committed development such as identified land, executed grid connection agreements, development approvals, and offtake agreements in place. Simply owning land that could potentially be suitable for a renewable energy project is not sufficient.

The 75% threshold

Where a foreign corporate investor holds renewable energy assets indirectly through a company or fund, rather than directly, the renewable energy assets must comprise at least 75% of the entity’s Australian taxable property for the discount to apply. This is a high threshold and may limit the concession’s practical availability for diversified infrastructure funds or vehicles with mixed asset portfolios.

The time limitation

The discount window runs until 30 June 2030 – approximately three and a half years from the anticipated commencement date, subject to when the Bill receives Royal Assent. Given that renewable energy investment typically involves holding periods of 20 to 30 years, the concession is most practically useful for secondary market transactions, that is, where an investor is acquiring an existing operating asset with a view to an exit within the window, rather than for new greenfield investments.

What You Should Do Now

Foreign corporate investors with existing Australian renewable energy holdings should assess whether a secondary market disposal before 30 June 2030 would be commercially advantageous under the concession. Those considering new acquisitions of operating renewable energy assets should factor the concession into their return modelling and exit planning, given the window closes in under four years. For diversified infrastructure funds, a review of asset composition is important. The 75% threshold for indirect interests is high and structures may need to be assessed carefully before assuming eligibility. The Bill remains before Parliament and may be subject to amendment before enactment; investors should monitor its progress closely.