Federal Budget 2026–27
Tax, trust rules rewritten for business and investors
The Federal Budget 2026-27 has fundamentally reshaped how middle market businesses invest, structure and grow.
Capital gains tax rules have been wound back, negative gearing will be significantly curtailed, and discretionary trusts will no longer be tax attractive.
Long-standing wealth-creation strategies must now be revisited. Businesses need to understand their structures, consider their exposure, and take steps to respond.
Fast facts
Deficit
$31.5b forecast deficit for 2026–27.
Revenue & expenditure
$798.1b in revenue. $833.3b in spending.
Government debt
Gross debt to surpass $1 trillion for the first time.
Inflation
CPI projected at 2.5%, within the RBA's target band.
CGT reform
50% CGT discount removed. Replaced with cost base indexation and a minimum 30% tax rate
Negative gearing
Limited to new builds from Budget night. Existing properties grandfathered.
Discretionary trusts
Minimum 30% tax on trust distributions from 1 July 2028.
Loss carry back
Reintroduced for companies with turnover under $1b. Offset losses against prior year tax.The Federal Budget 2026-27 has rewritten the rules on capital gains tax, negative gearing and discretionary trusts in a sweeping reset of Australia’s tax landscape.
For middle market businesses and investors, long-standing wealth-creation strategies must now be revisited – this is a moment for active reassessment, not passive observation.
The Budget’s tax reforms roll out in stages from mid-2026 through to 2030, covering CGT, negative gearing, trusts, FBT, R&D incentives and more. Use this guide to track the key dates and plan ahead.
From 1 July 2028, a 30% minimum tax will apply to discretionary trust distributions, removing the flexibility that has made trusts a preferred structure for middle market businesses and family groups. Understand the impact, the exclusions, and the restructuring window available before the changes take effect.
Proposed capital gains tax reforms will fundamentally change how gains are taxed from 2027, with implications for long‑held assets, investment structures and succession planning.
Proposed negative gearing reforms will significantly change how rental losses can be deducted for residential investment properties acquired after the Budget announcement, while grandfathering existing arrangements.
Personal tax measures aimed at easing cost of living pressures include a new Working Australian Tax Offset and an increase to the Medicare levy low income threshold.
From permanent instant asset write-off to reintroduced loss carry-back and expanded R&D incentives, the Budget offers focused measures for middle market businesses, but no sweeping reform.
Changes to the Electric Vehicle FBT exemption will alter how salary‑packaged EVs are taxed from 2029. Find out what’s changing, who is affected, and the transitional rules for existing arrangements.
While the Budget included no significant superannuation reforms, recent legislative changes and related tax measures may have implications for superannuation structures and planning.
New funding has been allocated to strengthen the prevention, detection and response to fraud across the tax and superannuation systems.
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