The Australian Federal Budget 2026–27, delivered on 12 May 2026, outlines the Government's strategy to address cost-of-living pressures while supporting long-term economic growth. The main tax-related points are summarised below.
The Budget grouped its tax measures across individuals, business, and other areas:
| Measures for individuals | Measures for business | Other measures |
|---|---|---|
| $250 Working Australians Tax Offset (WATO) | Permanent $20,000 instant asset write-off | Extending the ban on foreign purchases of established dwellings |
| $1,000 standard deduction for work-related expenses | Reintroducing "loss carry back" for companies | Protecting the tax system against fraud |
| Previously announced tax cuts in 2027 and 2028 | Loss refundability for small start-up companies | Global Anti-Base Erosion (GloBE) rules |
| Increasing the Medicare levy low-income thresholds | Dynamic PAYG instalment calculations | Temporary reduction of fuel excise & heavy vehicle road user charge |
| Private Health Insurance (PHI) rebate changes | Research & Development (R&D) tax incentives | Support for the Small Business Debt Helpline |
Beyond the headline measures, the Budget signalled four structural reforms that warrant closer attention:
| Reform | What's changing |
|---|---|
| Negative gearing on residential property | From 1 July 2027, losses from established residential properties will only be deductible against rental income or capital gains from residential properties. Excess losses are carried forward and can be offset against residential property income in future years. |
| Discretionary (family) trusts | The Government will introduce a minimum 30% tax on discretionary trusts. |
| Capital Gains Tax (CGT) | Replacing the 50% CGT discount with cost-base indexation, plus a 30% minimum tax on net capital gains; changes also flagged for the foreign resident CGT regime. |
| Fringe Benefits Tax (FBT) | Reducing the FBT concession for electric cars. |
We've prepared deeper explainers on the two reforms most likely to affect investors and business owners:
Book a free initial consultation and we'll walk you through what the 2026–27 measures mean for your situation.
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