Latest Accounting and Finance insights for Businesses

The Federal Budget Breakdown 2026/27 for Property Investors

Thu, 14 May 2026 05:47:03 GMT

If you own investment properties — or have been thinking about buying one — last night's Budget directly affects you.

The 2026–27 Federal Budget, delivered by Treasurer Jim Chalmers on the evening of 12 May 2026, is one of the most significant overhauls of the Australian tax system in nearly three decades.

In a single Budget, the Government has made changes to capital gains tax, negative gearing, trust distributions, superannuation, electric vehicles, research and development, and a range of cost-of-living measures.

Almost every one of our clients will be affected in some way.

Property Investors and Changes to Negative Gearing

If you own investment properties — or have been thinking about buying one — last night's Budget directly affects you.

The changes announced are significant and the decisions you make in the next twelve months could materially affect your financial outcome. There are two major changes you need to understand:

The changes to negative gearing; and
The reform to capital gains tax.

These 2 changes are separate measures, but they interact with each other — and together they shift the economics of property investment more than any single Budget measure since the introduction of the CGT discount in 1999.

NOTE: Contracts entered into before 7:30pm on 12 May 2026 — including those not yet settled — are covered by the grandfathering provisions.

If you own existing investment properties :

No immediate action is required on the negative gearing front — your arrangements are protected. The CGT question is worth reviewing, particularly if you have been thinking about selling within the next few years. We can model the tax outcome under both the current and new rules for each property.

If you are considering selling a property:

Before 1 July 2027, the full 50% CGT discount applies to the entire gain to date. After that date, only gains accrued before 1 July 2027 attract the discount. The decision to sell before or after that date is not straightforward and depends on your individual circumstances. Do not sell — or decide not to sell — without modelling the numbers first.

Click here to view our Blog on The Budget's Changes to Capital Gains Tax

Click here to view our Blog on The Budget's Individual Tax Measures

What Should You Do Now?

Other Federal Budget 2026/27 Blogs

The Federal Budget Breakdown 2026/27 for Changes to Capital Gains Tax

Thu, 14 May 2026 05:47:03 GMT

One of the most significant measures in this Budget is the replacement of the 50% CGT discount with cost base indexation for capital gains arising on or after 1 July 2027, combined with a new 30% minimum tax on net capital gains.

The 2026–27 Federal Budget, delivered by Treasurer Jim Chalmers on the evening of 12 May 2026, is one of the most significant overhauls of the Australian tax system in nearly three decades.

Almost every one of our clients will be affected in some way.

Changes to Capital Gains Tax

This applies to all CGT assets — including pre-1985 CGT assets, shares, investment properties, and business assets — held by individuals, trusts, and partnerships.

Indexation was the method used for CGT in Australia from 1985 through to 1999 — in effect, we are returning to the pre-1999 approach.

To confirm, the pre-CGT assets have lost their exemption and are now included in the new CGT rules.

Since 1999, if you have owned an asset for more than 12 months, only 50% of your capital gain has been taxable. From 1 July 2027, that discount is replaced by cost base indexation — meaning your original purchase price is adjusted for inflation (CPI) before the gain is calculated.

A 30% minimum tax then applies to the remaining indexed gain. Even if your marginal rate is lower, you will pay at least 30%.

In the example above, holding the property for 5 more years results in approximately $83,000 more tax — but also $400,000 more in sale proceeds .

The numbers look very different for each client depending on their tax rate, growth assumptions, and holding period.

There is no universal right answer — which is exactly why the conversation with us matters.

Note: These figures are illustrative only. They assume CPI indexation of 3% per annum over 15 years, a 47% combined marginal rate and Medicare Levy, and a time-proportionate split of gains between pre and post 1 July 2027.

Final methodology is subject to legislation.

Talk to us before making any decisions. But here is a practical framework for thinking through your situation:

Click here to view our Blog on The Budget's Changes to Individual Tax Measures

Click here to view our Blog on The Budget's Changes to Property Investors and Negative Gearing

The Capital Gains Tax Changes and How it Will Change the Amount of Tax You Pay

Below is an Illustrated example:

Suppose you purchased an investment property ten years ago for $600,000. It is worth $1,200,000 today. You are deciding whether to sell now — before 1 July 2027 — or hold for another five years and sell for $1,600,000.

What Should You Do Now?

If you are considering selling a Capital Gains Asset:

Before 1 July 2027, the full 50% CGT discount applies to the entire gain to date. After that date, only gains accrued before 1 July 2027 attract the discount.

The decision to sell before or after that date is not straightforward and depends on your individual circumstances. Do not sell — or decide not to sell — without modelling the numbers first.

If you are a long-term holder with no near-term plans to sell:

The CGT changes do not require immediate action but do change the long-term economics of your portfolio.

It is worth updating your holding period assumptions and running a fresh tax projection to understand the full picture.

Other Federal Budget 2026/27 Blogs

The Federal Budget Breakdown 2026/27 for Business

Thu, 14 May 2026 05:47:03 GMT

The 2026–27 Federal Budget, delivered by Treasurer Jim Chalmers on the evening of 12 May 2026, is one of the most significant overhauls of the Australian tax system in nearly three decades.

Almost every one of our clients will be affected in some way.

The Federal Budget has offered some tax measures for immediate relief and opportunities for Small Business.

These include:

Since 2022, battery electric vehicles provided through novated lease or salary packaging arrangements have been fully exempt from Fringe Benefits Tax (FBT), making them significantly more cost-effective than equivalent petrol or diesel vehicles.

The 2026-27 Budget now announces a phased wind-back of that exemption.

If you currently have an EV under a novated lease or are thinking about entering one, the rules are changing in ways that could significantly affect your after-tax cost.

This Budget has created both urgent obligations and genuine planning opportunities for business owners. Our recommendation is:

Contact us now if your company has paid tax in recent years and is in a loss — a cash refund may be available.
Arrange a structure review meeting with us if you operate through a trust or as a sole trader — the restructure planning must begin before the rollover window opens in July 2027.
Do not make any immediate changes to trust distributions or arrangements pending release of the Trust Minimum Tax legislation.

We will be in touch with clients we believe are most directly affected.

Please do not wait to hear from us if you have questions or want to talk through your situation.

Click here to view our Blog on The Budget's Changes to Individual Tax Measures

Click here to view our Blog on The Budget's Changes to Property Investors and Negative Gearing

Fringe Benefits Tax Exemption on Electric Vehicles (EV)

What Should You Do Now?

Other Federal Budget 2026/27 Blogs

From 1 July 2027, small and medium businesses can opt in to monthly PAYG Instalment payments calculated using ATO-approved accounting software.

This allows tax instalments to better reflect real-time business activity and can smooth cash flow management.

We will advise you closer to the time on whether this is right for your business.

Click here to view our Blog on The Budget's Changes to Capital Gains Tax

Immediate Relief and Opportunity for Small Business

PAYG Instalment Modernisation

Discretionary Trusts and the 30% Minimum Tax

From 1 July 2028, the Government has announced that trustees of discretionary trusts will pay a 30% minimum tax on the taxable income of the trust. Beneficiaries (other than corporate beneficiaries) will receive non-refundable credits for the tax paid.

The practical effect is significant for businesses that distribute income to low-income beneficiaries — including adult children, non-working spouses, or retirees. Any beneficiary with a total tax liability below 30% on their distribution will see the excess credit permanently lost.

What We don't Know Yet.

A number of critical details will only be confirmed in draft legislation, which is expected during the second half of 2026:

How the credit mechanism will work for corporate beneficiaries — the announcement suggests they may not receive the same credits as individuals, which could result in double taxation.
The precise definition of income types excluded from the measure (primary production income, vulnerable minor income, and others).
Whether there are any transitional concessions for distributions already committed.

We will update you as soon as the legislation is available.

In the meantime, no changes to your trust arrangements should be made on the basis of the announcement alone.

Click here to view our Blog on The Budget's Capital Gains and what this Budget means for your Business

Capital Gains and what this Budget means for your Business

Thu, 14 May 2026 05:47:03 GMT

The Federal Budget contains some of the most significant tax changes for business owners in a generation. Whether you operate through a company, trust, or as a sole trader — and whether you are in growth mode, planning your exit, or somewhere in between — there are measures in this Budget that directly affect you.

We have prepared this briefing specifically for business owners, because the implications of these changes are more complex than a general summary can capture.

Some changes offer genuine opportunities — particularly for businesses that have struggled recently or are planning for growth.

Others, particularly the CGT and trust changes, require careful structural thinking before they take effect.

This Budget has created both urgent obligations and genuine planning opportunities for business owners. Our recommendation is:

Arrange a structure review meeting with us if you operate through a trust or as a sole trader — the restructure planning must begin before the rollover window opens in July 2027.
We can assess what your business is worth today, model the tax outcomes under different structures, and help you determine whether acting in the rollover relief window from 1 July 2027 is the right move.
Do not make any immediate changes to trust distributions or arrangements pending release of the trust minimum tax legislation.

We will be in touch with clients we believe are most directly affected.

Please do not wait to hear from us if you have questions or want to talk through your situation.

Click here to view our Blog on The Budget's Changes to Individual Tax Measures

Click here to view our Blog on The Budget's Changes to Property Investors and Negative Gearing

What this Means for You

Other Federal Budget 2026/27 Blogs

Capital Gains Tax - A Major Change for Business Owners

The CGT changes, combined with the proposed discretionary trust minimum tax (see below), make the question of business structure more important than it has been in 25 years.

Two questions are worth asking now:

Click here to view our Blog on The Budget's Changes to Capital Gains Tax

The most significant change in this Budget for business owners is the replacement of the 50% CGT discount with cost base indexation, plus a 30% minimum tax on net capital gains — effective for gains arising from 1 July 2027.

For business owners, it is potentially transformational — because of one specific issue: GOODWILL

What this means for you:

If you are thinking about selling your business — whether in the next year or the next five — the CGT changes make it more important than ever to model the tax outcome under different timing scenarios.

Is Your Business Structure Right For You?

The Government has announced a 30% minimum tax on discretionary trusts, proposed to start from 1 July 2028.

This is designed to limit the tax benefit of distributing trust income to beneficiaries on lower tax rates.

What this means for you:

If you operate through a discretionary trust or as a sole trader, please contact us to arrange a structure review.

We can assess what your business is worth today, model the tax outcomes under different structures, and help you determine whether acting in the rollover relief window from 1 July 2027 is the right move.

Changes to Discretionary Trusts

Note: All figures are illustrative and based on 2025–26 tax rates. Subject to final legislation.

Below is an illustrated example of the Current V Proposed tax consequences.

Click here to view our Blog on The Budget's Changes to Business

The Federal Budget Breakdown 2026/27 for Individual Wage Earners

Thu, 14 May 2026 04:45:12 GMT

The 2026–27 Federal Budget, delivered by Treasurer Jim Chalmers on the evening of 12 May 2026, is one of the most significant overhauls of the Australian tax system in nearly three decades.

Almost every one of our clients will be affected in some way.

Individual Taxpayers

Click here to view our Blog on The Budget's Changes to Capital Gains Tax

Click here to view our Blog on The Budget's Changes to Property Investors and Negative Gearing