The 2026-27 Federal Budget does more than announce tax changes. It signals a meaningful shift in how the Government is thinking about work, investment and small business.
What stands out is that these are not purely technical measures. They have real implications for cash flow, investment behaviour, remuneration planning and long term structure. Not every announcement is law yet, but several are already moving through the legislative process, which means the planning conversation should be happening now rather than when the rules commence.
The headline measures
Here are the announcements we think business owners, employers and investors should be watching:
For working Australians
- A $1,000 instant deduction for work related expenses from 2026-27
- The Working Australians Tax Offset, a permanent annual $250 tax offset for eligible workers
For property investors
- Negative gearing changes, limiting residential property claims to new builds from 1 July 2027
For investors generally
- Capital gains tax reform, replacing the 50% CGT discount with inflation adjusted indexation from 1 July 2027, alongside a minimum 30% tax rate on capital gains
For companies and small business
- A permanent two year loss carry back for companies with turnover up to $1 billion, from 2026-27
- A permanent small business instant asset write off, with the threshold set at $20,000
- Loss refundability for start ups from 2028-29, to support investment and early stage growth
For trusts
- Discretionary trust tax changes, applying a minimum 30% tax rate to distributions from 2028-29
For employers offering vehicle packaging
- Electric vehicle FBT changes, transitioning to a permanent 25% discount for eligible EVs above $75,000 from 1 April 2027, and for all eligible EVs from 1 April 2029
Why the commencement dates matter more than the headlines
The Budget conversation should not stop at what was announced on the night. The real impact comes from what is actually enacted, when it starts, and how quickly businesses and advisers adapt.
Look at the timing spread above. The instant asset write off and loss carry back apply from 2026-27, which is the year you are in now. Negative gearing and CGT changes are flagged for 1 July 2027. Trust distribution changes and start up loss refundability are further out again, from 2028-29.
That spread creates a planning window, and windows close.
Where the planning questions sit
If you hold or are buying investment property, the proposed restriction of negative gearing to new builds from 1 July 2027 is worth modelling against your holding strategy now, not in mid 2027.
If you are contemplating a significant asset sale, the shift from the 50% discount to inflation adjusted indexation, plus a minimum 30% rate, changes the after tax outcome materially. Timing and structure both matter.
If you distribute through a discretionary trust, a minimum 30% rate on distributions from 2028-29 challenges assumptions that have underpinned many family group structures for decades. There is time to think this through properly, and it should be used.
If you are planning capital expenditure, a permanent $20,000 instant asset write off gives you certainty to plan against, which is a genuine improvement on the year by year uncertainty businesses have lived with.
If EV packaging is part of your remuneration offering, the phase down means the value of the concession changes at two separate points. Employees currently considering a novated lease should understand what applies when.
What to do with this
For advisers, employers and business owners, this is a timely opportunity to review:
- Tax strategy for the current and following income years
- Planned asset purchases and their timing
- Trust structures and distribution patterns
- Workforce remuneration settings, including vehicle packaging
- Investment property holdings and any planned acquisitions
We will be watching closely as the legislation develops and the practical detail becomes clearer, and we will update clients as measures move from announcement to law.
Frequently asked questions
Are these measures law? Not all of them. Several were announcements only and remain subject to the legislative process. Some are already progressing. This is a reason to plan and stay flexible rather than to restructure prematurely.
Should I sell an asset before the CGT changes commence? That depends entirely on the asset, your holding period, your other income and your broader plans. It is worth modelling rather than assuming, and it is not a decision to make on a headline.
Does the negative gearing change affect properties I already own? The announcement limits residential property claims to new builds from 1 July 2027. Transitional detail is the part to watch, and we would encourage existing investors to review their position once the drafting is available.
Is the instant asset write off really permanent this time? The announcement sets a permanent threshold of $20,000, which removes the annual uncertainty businesses have dealt with in recent years. As always, it is the enacted legislation that governs.
Which measures affect you?
If you would like to understand what these changes mean for your business, your structure or your investments, we can work through the specific measures that apply to you and map out the decisions worth making before the commencement dates arrive.
Call us on +61 417 733 869 or get in touch to book a strategy session.
This article is general information only and does not take your personal circumstances into account. Several of the measures discussed were Budget announcements and are not yet law. Please contact us for advice specific to your situation.