The 2026–27 Federal Budget delivered by Treasurer Jim Chalmers introduces a range of proposed reforms that may significantly impact property investors, discretionary trusts, tax planning strategies, superannuation, and cost-of-living relief measures.
At Roy A McDonald Pty Ltd Accountants and Fiducian Financial Services Doncaster, we have summarised the key highlights and what they may mean for you, your family, and your business.
Housing & Investment Property Changes
One of the most widely discussed announcements is the proposed reform to negative gearing and Capital Gains Tax (CGT), expected to commence from 1 July 2027.
Proposed Negative Gearing Changes
The Government has proposed limiting negative gearing on residential properties to new builds only from July 2027. Existing investment properties owned before Budget night are expected to be grandfathered under the current rules.
Under the proposal:
- Investors purchasing existing properties after Budget night may still deduct losses against rental income, but losses may no longer offset other taxable income.
- Unused losses could instead be carried forward to future years.
- The Government estimates these reforms may help improve housing affordability over time.
Capital Gains Tax Reform
The Budget also proposes replacing the current 50% CGT discount with a new cost-base indexation model and introducing a minimum effective tax rate on capital gains.
Key proposed measures include:
- A minimum 30% tax rate on gains for many investors.
- Pensioners and income support recipients expected to be exempt.
- Existing gains accrued before 1 July 2027 are proposed to retain access to the current 50% CGT discount.
- Investors purchasing new builds may still have access to the current CGT discount rules.
These proposed reforms may have significant implications for long-term investment strategies, property ownership structures, and retirement planning.
Discretionary Trust Tax Changes
The Government also announced a proposed minimum 30% tax on discretionary trusts from 1 July 2028.
Important points include:
- Trustees would be responsible for paying the tax.
- Beneficiaries would still declare distributions in their tax returns.
- Small business owners may be given a transition period to restructure into companies or fixed trusts.
- Certain trusts, including superannuation funds, deceased estates, charitable trusts, and some primary production activities, may remain exempt.
These proposed changes could affect many family businesses and investment structures commonly used for asset protection and tax planning. Professional advice will be important well before implementation.
Personal Tax & Cost of Living Measures
New Working Australians Tax Offset (WATO)
From the 2027–28 financial year, eligible workers may receive a new $250 tax offset for income earned from employment or business activities.
$1,000 Instant Tax Deduction
From 1 July 2026:
- Employees and sole traders may be able to claim up to $1,000 in work-related expenses without retaining receipts.
- Taxpayers claiming above this threshold would still need traditional substantiation records.
The Government estimates millions of Australians may benefit from simplified deduction rules and reduced compliance requirements.
Superannuation & Retirement Planning
While no major new superannuation tax measures were introduced, previously announced reforms continue to progress, including:
- The Superannuation Guarantee is increasing to 12% from 1 July 2026.
- Payday super obligations requiring employers to pay superannuation at the same time as wages.
These ongoing changes reinforce the importance of reviewing retirement strategies and employer payroll systems.
Aged Care & Disability Support
The Budget includes substantial additional funding for aged care and disability support services.
Aged Care Measures
The Government announced approximately $3.7 billion in aged care funding from 1 July 2027, including:
- Additional residential aged care beds.
- Expanded Support at Home packages.
- Increased dementia support services.
NDIS Reforms
Further reforms to the National Disability Insurance Scheme (NDIS) are also progressing, with proposed measures aimed at:
- Tightening eligibility requirements.
- Reducing fraud and cost escalation.
- Standardising functional assessments.
These reforms are expected to be implemented progressively over coming years.
Electric Vehicle Tax Changes
The Government also announced changes to electric vehicle tax concessions:
- From April 2027, electric vehicles above $75,000 may only receive a partial Fringe Benefits Tax concession.
- From April 2029, eligible EVs below the luxury car tax threshold may receive a 25% tax discount.
These changes may impact salary packaging and vehicle purchasing decisions for both businesses and employees.
What Should You Do Next?
Many of the Budget announcements remain proposed measures and may change before becoming law. However, they highlight the growing importance of proactive tax planning, investment structuring, retirement planning, and estate planning.
If you would like to understand how these proposed changes may affect your personal or business circumstances, please contact the team at:
Roy A McDonald Pty Ltd Accountants
Fiducian Financial Services Doncaster
You can also view the official Federal Budget information via the Australian Federal Budget Website and read the full Fiducian 2026–27 Federal Budget Summary.
Source: www.fiducian.com.au & https://budget.gov.au/index.htm
Lindale Insurances Pty Ltd ATF Lindale Insurances Trust ABN 27 027 421 832 is a Franchisee of Fiducian Financial Services Pty Ltd, Level 4, 1 York Street, Sydney NSW 2000. AFSL 231103 ABN 46 094 765 134.
The information (including taxation) provided on this website is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement.
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