2026 Federal Budget Changes: What Investors, Property Owners and Retirees Need to Know

The 2026 Federal Budget has introduced some of the biggest proposed tax and investment changes Australia has seen in many years, particularly around property investing, capital gains tax and discretionary trusts.

At Everyday Wealth, many of the conversations we have with clients across the Northern Beaches revolve around long-term wealth creation, retirement planning, tax strategy and structuring investments correctly. This Budget reinforces why strategy, flexibility and ongoing reviews remain so important. 

Importantly, many of the measures announced are still only proposals at this stage and will require legislation before becoming law. There will likely be significant debate over the coming months and some measures may ultimately change before implementation.

At a high level, we believe the Budget reinforces several themes we already focus on heavily within our advice process:

• Long-term strategy over short-term reactions
• Structure matters
• Flexibility matters
• Superannuation remains extremely valuable
• Ongoing reviews become increasingly important as legislation evolves

Key Takeaways

• Existing investment properties appear largely grandfathered
• Superannuation has largely been carved out from many proposed investment tax changes
• Proposed CGT reforms may ultimately have a bigger long-term impact than negative gearing changes
• New builds remain more attractive than established property under the current proposals
• Many measures are still not law and may change materially before implementation
• At this stage, we do not believe these proposals warrant rushed decision making

Personal Tax Cuts Continue

The previously legislated tax cuts are still scheduled to proceed.

From 1 July 2026:
• The 16% tax bracket reduces to 15%

From 1 July 2027:
• The same bracket reduces further to 14%

For many Australians earning above $45,000, this equates to approximately:

• $268 p.a. tax saving from 2026–27
• A further $268 p.a. from 2027–28

The Government has also proposed:

• A new $250 Working Australians Tax Offset from 1 July 2027
• A new $1,000 instant tax deduction from 1 July 2026 for work-related expenses without receipts

At a high level, these measures are aimed at providing modest tax relief and simplifying tax returns for many workers.

Capital Gains Tax (CGT) Reform

Potentially the biggest proposed change in the Budget relates to capital gains tax.

From 1 July 2027, the Government has proposed replacing the current 50% CGT discount for individuals and trusts with:

• Inflation indexation of the cost base
• A minimum 30% tax on real capital gains

Importantly:

• Existing gains accrued before 1 July 2027 remain under current rules
• The main residence exemption remains unchanged
• Small business CGT concessions remain unchanged
• SMSFs and superannuation funds are largely excluded

At a practical level, this could:

• Increase the relative attractiveness of holding long-term growth assets inside superannuation structures
• Increase the importance of ownership structure and tax planning over time
• Reduce some of the historical advantages of holding growth assets personally outside super

Importantly, many existing arrangements are proposed to be grandfathered, meaning current investors may see limited immediate impact.

Negative Gearing Changes

Another major proposal relates to negative gearing.

Under the proposed rules:

• Existing investment properties owned before Budget night are grandfathered
• Newly built properties remain unaffected
• Established residential properties purchased after Budget night may only be able to offset losses against future residential property income and capital gains

The proposed changes are currently focused on residential property and do not presently extend to commercial property or share investing.

Importantly, SMSFs are excluded from these proposed changes.

This may:

• Increase the attractiveness of new builds relative to established properties
• Lead some investors to reassess ownership structures, including SMSFs
• Reduce some of the traditional tax benefits of established residential property investing over time

At this stage, accumulated losses still appear able to carry forward and offset future residential property income or eventual capital gains on sale.

Discretionary Trust Changes

The Government has also proposed introducing a 30% minimum tax on discretionary trusts from 1 July 2028.

This could significantly impact:

• Family trust income splitting strategies
• Investment structures using discretionary trusts
• Small business structures operating through trusts

There is proposed rollover relief from 1 July 2027 to allow restructuring into companies or fixed trusts where appropriate.

For many clients, this reinforces the importance of regularly reviewing structures rather than simply “setting and forgetting” them.

Superannuation Remains Relatively Attractive

One of the biggest themes we took from this Budget is that superannuation has largely been carved out from many of the broader investment tax changes.

While Division 296 tax on balances above $3 million is still proceeding from 1 July 2026, super continues to remain one of the most tax-effective long-term investment environments available.

We believe this further reinforces the importance of:

• Long-term super contribution strategies
• Appropriate asset allocation inside super
• Reviewing where assets are held over time
• Ongoing retirement and tax planning

For many Australians, this may continue to support strategies focused on gradually building wealth inside the superannuation environment over time.

Small Business Measures

For business owners, key proposals include:

• Making the $20,000 instant asset write-off permanent
• Reintroducing company tax loss carry-back provisions
• Additional support for startup businesses

There are also broader proposed changes around discretionary trust taxation which may become increasingly important for business owners over the coming years.

What This Could Mean Practically

At a practical level, we believe the proposed changes further reinforce the importance of:

• Reviewing ownership structures regularly
• Thinking long term rather than reacting emotionally to headlines
• Understanding where assets are held and why
• Maximising flexibility where possible
• Reviewing super contribution opportunities over time
• Modelling property, shares and super strategies together rather than in isolation
• Ongoing advice and strategy reviews as legislation evolves

For many investors, the changes may ultimately shift the focus away from purely chasing tax deductions and more towards long-term after-tax wealth creation and retirement outcomes.

What We’re Watching

Over the coming months, we will be monitoring:

• Final legislation wording
• Whether the CGT changes proceed in full
• Potential amendments to negative gearing proposals
• Whether trust reforms are softened during consultation
• Strategic opportunities created through ownership structures and superannuation

For full Budget papers and announcements, you can also visit the Australian Treasury website:

Budget information

Our Initial Thoughts

At a high level, the Budget appears focused on:

• Reducing historical tax advantages around property and trust structures
• Increasing taxation on investments held outside super
• Encouraging new housing supply
• Providing modest personal tax relief
• Making superannuation relatively more attractive over time

Importantly, we do not believe these proposals warrant rushed decision making at this stage.

Many measures are still only proposals and may change materially before becoming law. As always, we will continue reviewing the detail closely and discussing any relevant impacts with clients as part of ongoing reviews and strategy discussions.

The biggest takeaway for us is that structure, flexibility and long-term strategy continue to matter more than ever.

If you would like to understand how these proposed changes may impact your personal situation, investments or retirement plans, feel free to get in touch with the Everyday Wealth team