Summary of key dates for tax reform announced in the Federal Budget 2026-27.
Taxation of discretionary trusts
| Measure |
Effective date |
Explanation |
| Minimum 30% tax on discretionary trust distributions |
1 July 2028 |
30% tax liability payable by the trustee on all discretionary trust distributions. Beneficiaries (other than corporate beneficiaries) receive a non-refundable tax credit. |
Capital Gains Tax (CGT) changes
| Measure |
Effective date |
Explanation |
| Indexation of capital gains |
From 1 July 2027 |
Capital gains for assets held for over 12 months will be calculated using the indexation method from this date (transitional rules apply). |
| 30% minimum tax on capital gains of all assets, including pre-CGT assets |
From 1 July 2027 |
Capital gains for individuals and trusts will be subject to a 30% minimum tax rate for all asset holders.
Pre-CGT assets subject to 30% minimum tax on gains accrued from 1 July 2027.
|
| Choice for new residential builds |
From 1 July 2027 |
Choice between 50% discount or indexation to calculate net capital gains for new builds sold from 1 July 2027. |
Negative gearing
| Measure |
Effective date |
Explanation |
| Negative gearing exclusion for existing properties |
From 7:30PM (AEST) on 12 May 2026 |
Negative gearing for residential properties will be disallowed for properties acquired after this date. |
| Negative gearing – losses |
From 1 July 2027 |
Losses from established residential properties will only be deductible against rental income or capital gains from residential properties. |
| New residential properties |
From 1 July 2027 |
Will continue to be eligible for negative gearing. However, the announcement does not clearly specify the relevant construction start or completion date. |
Business tax incentives
| Measure |
Effective date |
Explanation |
| $20,000 Instant Asset Write-Off |
From 1 July 2026 |
The immediate write-off of assets costing less than $20,000 for small business will be made permanent. |
| PAYG instalment changes |
From 1 July 2027 |
Expanded access to simplified monthly PAYG instalments. |
| Expanded roll-over relief for discretionary trusts |
1 July 2027 to 30 June 2030 |
Easier to access tax relief for discretionary trusts to roll-over into other structures (such as companies). |
| Loss carry-back |
From 1 July 2026 |
Companies with aggregated annual global turnover of less than $1 billion will be able to carry back a tax loss and offset it against tax paid in the prior two income years. Loss carry-back will be limited by a company’s franking account balance. |
| Refundable tax offsets for losses of small start-ups |
From 1 July 2028 |
Start‑up companies with aggregated annual turnover of less than $10 million that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset, subject to a cap based on FBT and PAYG paid for Australian losses for the loss year. |
Individual tax measures
| Measure |
Effective date |
Explanation |
| Instant $1,000 tax deduction |
From 1 July 2026 |
$1,000 instant tax deduction for work related expenses of individual taxpayers earning income from labour. |
| $250 Working Australians Tax Offset |
From 1 July 2027 |
$250 permanent annual tax offset for Australian resident individuals for income derived from work, such as wages and salaries, and business income of sole traders. |
| Increased Medicare Levy low-income threshold |
From 1 July 2025 |
Medicare Levy threshold is increased by 2.9% for singles, families and seniors from 1 July 2025. |
Foreign resident Capital Gains Tax
| Measure |
Effective date |
Explanation |
| Foreign resident CGT – renewables concession |
From commencement until 30 June 2030 |
Transitional arrangements providing a 50% CGT discount for foreign residents extended until 30 June 2030 for disposal of certain renewable energy assets. |
| Changes to real property definition and principal asset test |
Prospective from after Royal Assent |
Definition of taxable Australian real property expanded to cover a broader range of assets. Principal asset test for indirect interests expanded from a point-in-time test to a 365-day test. |
| Changes to real property definition (State/Territory severance) |
Retrospective (from 12 December 2006) |
Definition of “real property” to be set by Commonwealth Law rather than state and territory laws. |
Fringe Benefits Tax (FBT) & Electric Vehicles
| Measure |
Effective date |
Explanation |
| Electric vehicle FBT discount reduced to 25% |
From 1 April 2029 |
Electric vehicles provided after 1 April 2029 to receive a 25% discount on FBT. Existing electric vehicle arrangements to retain the FBT discount rate applicable at the commencement of the arrangement. |
| FBT discount for electric vehicles valued less than $75,000 – transitional rule |
Until 1 April 2029 |
FBT rate for electric vehicles valued less than $75,000 and provided before 1 April 2029 to be grandfathered. |
| FBT discount for electric vehicles valued greater than the Luxury Car Tax (LCT) threshold – transitional rule |
1 April 2027 – 31 March 2029 |
Electric vehicles valued greater than $75,000 but less than the fuel-efficient LCT threshold, provided between 1 April 2027 and 31 March 2029, to receive a 25% FBT discount. |
| Full electric vehicle FBT exemption ceases |
1 April 2029 |
For electric vehicles up to $75,000. |
Research and Development tax incentive
| Measure |
Effective date |
Explanation |
| Research and Development Tax Incentive (R&DTI) Reforms |
From 1 July 2028 |
Reforms to target R&DTI to higher-value and more intensive R&D activities. Increases the turnover threshold from $20m to $50m for higher (refundable) offsets. Removes eligibility for supporting R&D expenditure. |
Pillar Two
| Measure |
Effective date |
Explanation |
| Pillar Two – global minimum tax |
From 1 January 2026 |
Amendments to Australia’s global and domestic minimum tax legislation to implement the side‑by‑side package agreed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. |
Venture capital
| Measure |
Effective date |
Explanation |
| Existing eligible venture capital investor program closed |
From 7:30pm (AEST) on 12 May 2026 |
Existing program closed to new applications, replaced by new program from 1 July 2027. |
| Venture capital tax incentives expansion |
From 1 July 2027 |
Expanded access to venture capital tax incentives. |
Other measures
| Measure |
Effective date |
Explanation |
| Temporary fuel excise reduction |
1 April – 30 June 2026 |
Temporary reduction to the excise and excise‑equivalent customs duty rates (excise rates) applying to most fuel products and the road user charge for heavy vehicles. |
| Passenger Movement Charge increase |
From 1 January 2027 |
Increase in the Passenger Movement Charge by $10, from $70 to $80 per passenger. |
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