On Tuesday 12 May 2026, the Treasurer Jim Chalmers handed down the 2026-27 Federal Budget, outlining significant proposed changes impacting individuals, investors, businesses, employers and those suffering from disability.

Key measures include proposed changes to negative gearing and capital gains tax concessions, a new minimum tax on discretionary trust distributions, permanent increases to the instant asset write-off threshold, changes to electric vehicle FBT concessions, and new deductions and tax offsets for workers.

Our Federal Budget commentary highlights the key proposed measures and economic announcements most relevant to clients.

Key Budget Measures at a Glance

Individuals

• Tax Offsets: New $250 Working Australians Tax Offset
  Start date: 01/07/2027
• Tax Deductions: New $1,000 instant deduction for work expenses
  Start date: 01/07/2026
• Income Tax Rates: Personal income tax cuts on income between $18,201 and $45,000
  Start dates: 01/07/2026 and 01/07/2027

Investors

• Capital Gains Tax: CGT discount replaced with CPI indexation model
  Start date: 01/07/2027
• Capital Gains Tax: Grandfathering of pre-CGT status for all asset classes
  Start date: 01/07/2027
• Negative Gearing: Negative gearing on rental properties restricted to new builds
  Start date: 01/07/2027

Trusts

• Trust Distributions: 30% minimum tax on discretionary trust distributions and tax implications for corporate beneficiaries
  Start date: 01/07/2028

Businesses

• Instant Asset Write-Offs: Permanent $20,000 instant asset write-off
  Start date: 01/07/2026

Companies

• Losses: 2 year loss carry back reintroduced
  Start date: 01/07/2026

Employers

• FBT Exemption: EV FBT exemption scaled back
  Start date: 01/04/2027

The Bottom Line

The proposed measures represent some of the most significant taxation and investment reforms announced in recent years, particularly for property investors, discretionary trusts and capital gains taxation.

Clients should seek advice before making decisions or changing structures based on the proposed measures.

Need advice on the proposed changes?

Speak with Count Adelaide before implementing decisions based on the Federal Budget announcements.

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