Millions of Aussies will soon be able to make an instant $1,000 tax deduction claim for work-related expenses without needing to keep a box of receipts.

Treasurer Jim Chalmers has announced the major tax reform ahead of delivering his fifth Federal Budget on May 12.

An estimated 6.2million Aussies – or 42 per cent of taxpayers – will benefit from the reforms, which come into effect from July 1.

'We're helping Australians earn more and keep more of what they earn and this is another key way we're delivering for millions of Australian workers,' Chalmers said.

'We're reforming the tax system to make it easier, simpler and faster to do your taxes.

'This is tax reform and a bit of extra tax relief at the same time.'

The actual benefit depends on your income tax rate.

For many workers, that means an average tax saving of about $205, with some set to save up to $470. 

Because the measure starts from July 1, it applies to the 2026–27 financial year.

Claims over $1,000 will still require receipts.

Charitable donations and other non‑work‑related deductions can be claimed separately, in addition to the instant tax deduction.

Sales assistants, office workers, nurses and childcare workers are among those set to benefit the most from the tax changes.

Tax agents still urge Aussies to keep receipts for work expenses, regardless of the amount they wish to claim.

'If taxpayers stop tracking their expenses in the hope of an easy 'instant' deduction, they risk missing out on the full refund they are entitled to if their actual costs such as professional equipment, home office expenses, or self‑education surpass the flat $1,000 limit,' CPA Australia's Jenny Wong warned.

'While the government estimates the average relief at $205 per person, this is not a targeted reimbursement for the costs of earning an income; if left unchecked it could become a broad-based subsidy that does nothing to encourage taxpayers to take greater responsibility for their financial obligations.'

The move comes after Daily Mail revealed Chalmers is plotting a Budget night tax sting on property investors with older homes and backing a plan to give bigger capital gains tax (CGT) breaks to taxpayers who bankroll new apartments and townhouses.

The government is expected to slash capital gains tax concessions on older properties, with Labor aiming to funnel investor money away from established housing and into projects that add to Australia's supply of homes.

Senior government insiders told the Daily Mail last week the Treasurer wants the change locked into the May 12 budget and has already won Anthony Albanese's support, with ministers and advisers now mulling the final details of how hard Labor should go.

At the centre of the push is a 2025 McKell Institute report by UNSW Professor Richard Holden and the institute's CEO Edward Cavanough.

The document is being used by the government as the template for a capital gains tax shakeup.

Under one model being worked through in Canberra, investors buying into newly built apartments and townhouses would get a larger tax break when they sell, while those piling into older housing would get a smaller tax concession.

The formula being examined would lift the current 50 per cent capital gains tax discount to 70 per cent for new attached dwellings such as apartments and townhouses.

It would slash it to 35 per cent for existing dwellings, and leave it unchanged at 50 per cent for new houses.

Negative gearing would remain untouched, according to the McKell paper. If adopted, that would allow Labor to argue that existing investors are protected, even as the rules are changed for future purchases, minimising the political fallout from the change.

However, Nine newspapers reported on Monday that the Cabinet are also closely looking at a second option - returning the capital gains tax to the way it was originally calculated under the Hawke-Keating government. 

Under that original tax, the value of assets were pegged to inflation. The tax was applied to how much it went up in value.