Treasurer Jim Chalmers handed down the 2026-2027 Federal Budget on Tuesday night, calling it ‘the most important and ambitious Budget in decades.’ The Budget highlighted cost-of-living relief, widespread tax reform and a major shake-up of housing investment rules.
While these changes receive mixed responses from the public, there is the common misconception that asset holders may be greatly affected; but this doesn’t have to be the case.
If you are unsure of where you currently stand as an asset holder, please contact our advisers to discuss how the Federal Budget affects you and what options are available moving forward.
What Changed in the 2026-2027 Federal Budget Measures
Here are the key points discussed in the 2026-2027 Federal Budget:
- From 1 July 2027, the 50% discount to Capital Gains will be replaced by an inflation linked discount for properties that have been held for over 12 months. This applies to all capital gains assets that involve individuals, trusts and partnerships, but does not affect Superannuation Funds and SMSFs. New Build will have the choice to choose from the 50% discount to the new indexed cost base. Please speak to your adviser about which one will suit you.
- From 1 July 2027, Negative Gearing will be removed for any new properties purchased after 7:30 pm on 12 May 2026. Any properties bought before this date will still be eligible for negative gearing. Building new homes from that date will also be exempt from this change. However, what is classified as a ‘new build’ has not yet been established.
- From 1 July 2028, there will be a 30% minimum tax on discretionary trust income and there is no tax credit passed on to corporate beneficiaries.
- From 1 July 2028, there will be a new annual tax cut of up to $250.
- From 1 July 2027, there will be a new $1,000 instant tax deduction for workers. This allows individuals to claim $1,000 in work-related expenses without needing to keep receipt.
While we still have over a year before this comes into effect, it is best to start planning and discussing different options with your adviser.
Strategic Considerations Following the Federal Budget
Relevant discussion with your adviser should encompass:
- Reviewing your current structures, especially discretionary trusts.
- How the Budget affects you and your estate planning.
- How the new tax affects your future financial position e.g. retirement planning modelling.
- The cost of a restructure to see if it is worth making the change or not.
How your outlook of investing is after these changes.
How Can We Help?
The recent Budget changes introduce a number of structural and timing considerations that may impact how you manage and plan your assets moving forward. Rather than navigating them alone, speaking with an adviser can help you understand what they mean for your specific situation and what steps should be taken next.
Disclaimer: This information is general in nature and does not take into account your personal objectives, financial situation or needs.
