Federal Budget 2026-27: what it means for families, investors and business owners

Treasurer Jim Chalmers handed down the 2026-27 Federal Budget on Tuesday 13 May, describing it as the "most important and ambitious Budget in decades." That's a big call — but when you look at what's actually in it, it's not hard to see why.

This Budget contains some of the most significant tax reforms we've seen in years, and we'll be straight with you: a lot of our clients across the Macedon Ranges are going to feel the impact — particularly those with investment properties and family trusts.

We're already working through what these changes mean for our clients, and we'll be reaching out personally over the coming months to work through the detail and plan around these changes together. If you'd rather not wait, get in touch and we can have that conversation now.

Here's a plain-English breakdown of what was announced.

Capital gains tax is getting a major overhaul

This is the big one. From 1 July 2027, the 50% capital gains tax (CGT) discount — which has been in place since 1999 — will be replaced by cost base indexation, with a 30% minimum tax applied to most net capital gains on assets held for more than 12 months.

This affects individuals, trusts and partnerships across the board, and includes pre-1985 assets. The good news is that transitional arrangements mean the changes only apply to gains that accrue on or after 1 July 2027 — so gains on pre-1985 assets before that date remain CGT exempt.

If you're invested in new residential properties, you'll have a choice between the current 50% discount or the new cost base indexation approach.

If you hold investment assets of any kind, this change warrants a conversation with our team before 1 July 2027.

Negative gearing — the rules are changing for established properties

From 1 July 2027, negative gearing on established residential investment properties purchased from 7:30pm AEST on 12 May 2026 will no longer be deductible against your salary or other income. Instead, those losses will only be able to be offset against rental income or capital gains from residential property, with any excess carried forward to future years.

A few important details:

• If you already own an established investment property purchased before 7:30pm on Budget night, the current negative gearing rules apply until you sell

• Properties purchased between now and 30 June 2027 can still be negatively geared during that window — but not from 1 July 2027 onwards

• New builds are carved out entirely and can continue to be negatively geared before and after 1 July 2027

If you're thinking about buying an investment property, the timing and type of property you buy just became a lot more significant. Let's talk before you sign anything.

Good news for individuals: tax cuts and a new deduction

From 1 July 2026, the tax rate on income between $18,201 and $45,000 drops from 16% to 15%, and then again to 14% from 1 July 2027. These cuts were already legislated — the Budget just confirmed they're on track.

Also confirmed is the $1,000 instant tax deduction from 1 July 2026 for Australian tax residents with low work-related expenses. No receipts, no substantiation required — you can simply claim it. If your work-related expenses are over $1,000, you can continue to claim them the usual way.

From 1 July 2027, a new permanent Working Australians Tax Offset of $250 will also be available to employees and sole traders. Yes, a whole $250 😉

The $20,000 instant asset write-off is here to stay

Great news for Macedon Ranges small businesses: the $20,000 instant asset write-off has been made permanent from 1 July 2026 for businesses with turnover up to $10 million. No more scrambling to take advantage of it before a deadline — it's locked in.

Loss relief for companies

From 1 July 2026, companies with global turnover under $1 billion will be able to carry back a tax loss and offset it against tax paid up to two years earlier. This is a handy cashflow tool for businesses that have had a tough year.

Small start-up companies get an additional boost from 1 July 2028 — those with turnover under $10 million that make a loss in their first two years of operation will be able to access a refundable tax offset.

Discretionary trusts: a 30% minimum tax is coming

This one is significant for a lot of our clients. From 1 July 2028, trustees of discretionary trusts will be required to pay a minimum tax of 30% on the trust's taxable income. Beneficiaries will receive non-refundable credits for the tax paid by the trustee.

This doesn't apply to fixed trusts, superannuation funds, special disability trusts, deceased estates or charitable trusts — but if you run a family trust, this change is directly relevant to you.

To help businesses adjust, the Government will provide three years of expanded rollover relief from 1 July 2027 for those who want to restructure out of a discretionary trust into a company or fixed trust.

If your business or family wealth is structured through a discretionary trust, we strongly encourage you to get in touch. This is the kind of change that benefits from early planning.

Electric vehicles and FBT

A permanent 25% FBT discount will apply from 1 April 2029 for electric cars valued up to the fuel efficient luxury car tax threshold. Until then, EVs valued up to $75,000 provided to employees remain eligible for a 100% FBT exemption.

PAYG instalments going monthly

From 1 July 2027, small and medium businesses will be able to opt in to monthly PAYG instalment reporting and payments, using ATO-approved calculations embedded in accounting software. Businesses with a history of non-compliance will be required to move to monthly reporting.

A note from our team

This is a Budget with real consequences for real people — and for many of our Macedon Ranges clients, particularly those with investment properties and family trusts, the implications are significant enough to warrant a proper review of your current structure and strategy.

We're not going to leave you to figure this out on your own. Over the coming months, we'll be reaching out to every client we believe is impacted by these changes to work through the detail and plan a path forward together.

If you'd rather get ahead of it now, we'd love to hear from you. Get in touch with our Gisborne team and let's start the conversation.