24/06/2026
📧 Federal Budget 2026 (What It Means for You)
The Federal Budget released on 12 May 2026 introduced some of the biggest changes to investment taxation in over 20 years.
🎯 The Big Picture
The government is reducing tax benefits for investors, particularly property investors.
The goal is to:
• Make housing more affordable
• Reduce tax advantages over PAYG workers
• Encourage investment into new housing supply instead of existing property
🏡 1. Property Investing – Biggest Changes
✅ If you already own property
• Good news — you are mostly protected
• Existing investments keep:
o ✅ Negative gearing benefits
o ✅ Current CGT rules (for gains up to July 2027)
❌ If you buy AFTER 12 May 2026
Negative Gearing
From 1 July 2027:
• ❌ You can’t offset property losses against your salary
• ✅ Losses can only offset other property income
• ✅ Losses can be carried forward
👉 Exception:
• ✅ Still allowed for new builds only
💡 Simple Example
Before:
• You lose $10,000 on a property
• You reduce your taxable income → get a tax refund
After:
• You lose $10,000
• ❌ No tax refund
• ✅ You carry the loss forward instead
🧾 2. Capital Gains Tax (CGT) – Applies to ALL Investments
This is important — it doesn’t just impact property.
✅ Current system
• Hold asset >12 months → only 50% of gain is taxed
❌ From 1 July 2027
• The 50% discount is removed
• Replaced with:
o Inflation adjustment (“indexation”)
o Minimum 30% tax on gains
👉 This applies to:
• Property
• Shares
• Managed funds
• Most investments outside super
💡 Simple Example
Today:
• Gain = $200k
• Taxed on $100k
New system:
• Gain adjusted for inflation
• Then taxed (often results in more tax overall)
⚠️ Important (Grandfathering)
• Gains before 1 July 2027 still get the 50% discount
• Gains after that date use the new rules
📊 3. Trusts – Big Change for Families & Business Owners
From 1 July 2028:
• A minimum 30% tax applies to discretionary trusts
What this means:
• Less benefit from:
o Splitting income across family members
o Using lower-income beneficiaries
Simple Example:
Before:
• Income split to spouse/children → lower tax
After:
• Minimum 30% tax applies → less flexibility
🧓 4. What About Superannuation?
✅ Good news:
• These tax changes mainly affect personal and trust investments
• Super is largely untouched in this budget
What DID change in super:
• Super guarantee increasing to 12% (from 1 July 2026)
• Existing proposal:
o Higher tax on balances above $3M (unchanged direction)
💡 Key takeaway on super:
👉 Super is now relatively more tax-effective compared to investing personally
📈 5. What This Means for Strategy Going Forward
Before Budget
• Property investing was heavily tax-driven:
o Negative gearing
o CGT discount
After Budget
• Those benefits are reduced
Going forward, expect more focus on:
• ✅ Cash flow (not just growth)
• ✅ New builds over existing properties
• ✅ Long-term investing
• ✅ Using super more effectively
✅ What You Should Consider Next
Depending on your situation, it may be worth reviewing:
• Your current property portfolio
• Timing of any asset sales
• Whether new investments should be made inside super
• Trust structures before the 2028 changes
This information is general in nature only and is based on the Federal Budget announcements as at May 2026. It does not take into account your personal financial situation, objectives, or needs.
The Budget measures outlined are also proposed changes and may be subject to legislation, amendment, or clarification before becoming law.
Before making any financial, investment, tax, or structural decisions, you should seek advice from a registered tax agent or qualified financial adviser who can assess how these changes apply to your specific circumstances.
We strongly recommend you do not act on this information alone without obtaining personalised advice.
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