Federal Budget 2026-27 highlights

Major CGT, negative gearing and trusts tax reforms

Main tax-related measures announced include:

•  50% CGT discount abolished — to be replaced with an inflation-adjusted indexation method from 1 July 2027
  (subject to transitional arrangements) for all CGT assets held by individuals, trusts and partnerships for more than 12
  months. An exception will apply for new builds of residential properties.
• CGT minimum 30% rate — will apply on realised gains (including for pre-1985 assets) from 1 July 2027. Income
  support payment recipients, including Age Pension recipients, will be exempt from the minimum tax
• Minimum 30% tax on discretionary trusts — from 1 July 2028 a minimum tax of 30% will apply to the taxable
  income of discretionary trusts. However, it will not apply to other types of trusts, including fixed and widely held trusts,
  complying super funds, special disability trusts, deceased estates and charitable trusts.
• Negative gearing — to be limited to new builds from 1 July 2027. Residential properties currently owned at Budget
  time (7:30 pm AEST 12 May 2026) will be excluded until they are sold
• A new $250 working Australians tax offset (WATO) will apply from 1 July 2027 to all eligible Australian workers
  for their income derived from work
• Personal tax rates – the Budget confirmed the already-legislated reduction in the resident personal income tax rate
  from 16% to 15% (from 1 July 2026) and to 14% (from 1 July 2027) for the taxable income bracket from $18,201 to
  $45,000
• $1,000 standard deduction – confirmed for work-related expenses from the 2026-27 income year
• $20,000 instant asset write-off for small businesses – permanently extended
•  Loss carry-back regime – to be reintroduced from 1 July 2026 for businesses with an aggregated annual global
  turnover of less than $1 billion
• FBT exemption for EVs – the full FBT exemption for electric vehicles (EVs) will be phased out and replaced with a
  temporary $75,000 threshold
• Loss refundability for small start-ups – from 1 July 2028 for start-up companies with aggregated annual turnover
  of less than $10m that generate a tax loss in their first 2 years
• Venture capital tax incentives – the asset size caps will be increased from 1 July 2027
• R&D tax incentive – to be overhauled.