Impact of the proposed CGT tax on international education
Next Tuesday’s federal budget is expected to quietly do something that will damage Australian international education for years.
The headlines are about housing investors. But the change applies to far more than property.
Right now, if you make a profit selling shares you have held for more than a year, only half of that profit gets taxed. The government wants to remove that 50 per cent discount.
Here is why that matters for the people we want to attract to this country.
Most successful start-ups can’t afford to pay big salaries early on. So they pay people partly in shares. You take less cash for years, hoping the company grows and your shares become worth something.
If the company succeeds, your shares might eventually be worth hundreds of thousands of dollars. That payout is what makes the years of low pay worth it.
Under the proposed change, the tax on that payout would jump from around 23 per cent to as high as 47 per cent.
Compare that to where Australia’s competitors sit:
United States: about 24 per cent
United Kingdom: about 24 per cent
Australia under the new rules: up to 47 per cent
For a 28-year-old who finally cashes out $400,000 in shares after years of below-market pay, that is the difference between a house deposit and a tax bill.
This is not someone else’s problem for the international education sector.
The students we most want to keep are doing the maths before they even sign up. These are the ones who pay full fees, finish their studies, work in jobs Australia has shortages in, and justify the entire international education program.
They are now, more than ever, comparing future earnings between countries. And they have options: Toronto, London, Berlin, Singapore, and Auckland.
Luke Anear, who runs SafetyCulture, made this point clearly in the AFR this week. His own daughter joined Canva at 21. She used the shares she earned there toward a house deposit. That is the actual path. Shares turning into the housing that young Australians are told they cannot afford.
Closing that path does not make housing more affordable. It just means the only people who can buy homes are the ones who inherit them. Which is the opposite of what this policy is supposed to do.
For thirty years, Australia has sold international students the same dream. Come here. Study. Get a graduate visa. Build something. Stay. Unfortunately the “build something” part is what we are about to break.
#InternationalEducation #AustralianStartups #CGT #Budget2026 #FounderFlight #StudentVisa