The federal budget 2026-27 has landed, and if you own property, run a business, or have money in a family trust, this one is for you. The Albanese government has put some of the biggest tax reform proposals on the table in recent memory. And yes, they directly affect how you invest and how much tax you pay.
Let us get into it.
Are These Changes Already Law?
No. Everything announced in the Australian budget 2026 is still a proposal. These measures need to pass through parliament before they become law. But the direction is clear, and getting across the changes now puts you well ahead of the crowd.
Capital Gains Tax Changes: The 50 Per Cent Discount Is Going
This is the one that has investors paying close attention.
Right now, if you sell an asset you have held for more than 12 months, you only pay CGT on half the gain. That flat 50 per cent CGT discount has been a cornerstone of Australian investment planning for decades.
From 1 July 2027, that is proposed to change. The government would replace it with a discount tied to inflation and introduce a minimum 30 per cent tax on capital gains. The idea is that you only pay tax on your real gain, after inflation is accounted for. If inflation chipped away at your return, that portion is not taxed. But the blanket halving of gains regardless of real returns may be over.
A couple of important details worth knowing.
First, these CGT changes are set to only apply to gains that arise after 1 July 2027. Sell before then, and the old rules still apply. Second, investors in new builds could get a choice. You could use either the new inflation-based discount or stick with the 50 per cent CGT discount. That flexibility is there specifically to keep investment flowing toward new housing.
Negative Gearing Changes: What Is Actually Happening
The federal budget 2026 negative gearing changes are significant, but they are not as sweeping as some headlines might suggest.
From 1 July 2027, negative gearing is proposed to be limited to new builds. That is the core change.
If you buy an established property after budget night, you could still offset rental losses against your residential property income. You could also carry those losses forward to future years. What you may no longer do is deduct those losses against your other income, like your salary or wages.
If you already own an established property, nothing changes. The government has been clear that existing arrangements stay in place for properties held before budget night.
And if you buy a new build going forward, you may keep full negative gearing entitlements, including the ability to offset losses against your wage income.
So, should you rush out and buy an established property before the rules change? The honest answer is: think it through properly. Buying the wrong property in a panic rarely works out well. Strategic planning matters far more here than speed.
Family Trust Tax: A Minimum 30 Per Cent Rate Is Coming
If your family uses a discretionary trust to distribute income to members on lower tax rates, this part of the budget 2026 summary affects you directly.
From 1 July 2028, a minimum 30 per cent trust tax is proposed on distributions from discretionary trusts. The government is targeting arrangements where high-income earners shift income through trusts to reduce their overall tax bill.
The good news is there is time to prepare. Rollover relief is proposed to run for three years from 1 July 2027, giving small businesses and others the window to restructure without a harsh tax consequence. If your trust structure needs a rethink, that three-year period is your runway.
Workers Are Getting a Tax Cut Too
Not everything in this budget costs you money. From 2027-28, the government is proposing a $250 Working Australians Tax Offset for over 13 million workers. That sits on top of three already legislated tax cuts and a new $1,000 instant deduction for work-related expenses.
That $1,000 instant deduction is worth knowing about on its own. From 2026-27, you could claim up to $1,000 in work-related expenses without itemising every receipt. Around 6.2 million workers are expected to benefit, saving an average of $205 each for that year.
Combined, the government says an average worker could keep up to $2,816 more per year from all five tax cuts together.
Small Business: Some Welcome Changes
If you run a small business, there are a few things in this federal budget that are proposed to work in your favour.
The $20,000 instant asset write-off is set to be made permanent from 1 July 2026. If your turnover is under $10 million, you can immediately deduct eligible assets under $20,000. Making it permanent means you can plan around it with confidence, rather than waiting each year to see if it gets extended again.
Loss carry back is also proposed to return from 2026-27. If your business makes a loss this year, you could claim a refund against tax paid in the previous two years. Up to 85,000 companies, mostly small businesses, are expected to benefit.
From 2028-29, start-ups in their first two years may also get a refund for tax losses, up to the value of fringe benefits tax and withholding tax paid on employee wages. Up to 25,000 young companies a year are expected to benefit.
Federal Budget 2026 Australia at a Glance
CGT discount: Flat 50 per cent replaced with an inflation-based discount and a 30 per cent minimum tax, from 1 July 2027. New builds can still choose the 50 per cent discount.
Negative gearing: Limited to new builds from 1 July 2027. Existing property owners and new build investors retain current entitlements.
Trust tax: Minimum 30 per cent tax on discretionary trusts from 1 July 2028. Three years of rollover relief from 2027.
Worker tax cuts: $250 offset from 2027-28 and a $1,000 instant work-related deduction from 2026-27.
Small business: Permanent $20,000 instant asset write-off from 2026, loss carry back from 2026-27, and start-up tax loss refunds from 2028-29.
What Should You Do Next?
You do not need to panic or make any rushed decisions right now. These are proposals, not yet law. But the changes being flagged are real, and the earlier you understand how they might affect your situation, the more options you will have.
If you hold investment properties, it is worth looking at your portfolio in light of the CGT and negative gearing changes. If you use a family trust, the 2028 start date for the minimum tax gives you time, but not unlimited time, to review your structure. And if you are a small business owner, the loss carry back and permanent instant write-off changes are worth working into your planning now.
Clear Tax can help you make sense of all of this. Whether it is reviewing your investment strategy, understanding your trust structure, or just getting clear on what these changes mean for your tax position, our team is ready to walk through it with you. Get in touch today.
Frequently Asked Questions
Do the CGT changes affect gains I have already made?
No. The new rules only apply to gains that arise after 1 July 2027.
I already own an investment property. Does negative gearing change for me?
No. If you held the property before budget night, your current arrangements are not affected.
When does the family trust minimum tax start?
From 1 July 2028, with rollover relief available from 1 July 2027.
Are any of these changes already in effect?
No. All of the federal budget 2026-27 tax changes are proposals that still need to pass parliament.
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