Hello Chasers,
The Federal Budget 2026–27 introduced a range of proposed tax and business reforms that could affect Australian businesses, investors, and individuals over the coming years.
From changes to capital gains tax (CGT) and negative gearing, through to updates for small businesses, discretionary trusts, and personal tax relief, the Budget outlines several measures that may influence future financial and business decisions.
At Ceebeks Business Solutions, we’ve summarised the key announcements business owners and taxpayers should be aware of
Changes to Capital Gains Tax (CGT)
One of the most significant announcements is the proposed reform to the capital gains tax regime.
From 1 July 2027, the Government proposes replacing the current 50% CGT discount with a cost base indexation system alongside a 30% minimum tax on net capital gains for eligible assets held longer than 12 months.
Importantly, transitional rules are expected to apply, meaning gains accrued before 1 July 2027 may still access the current CGT discount rules.
The changes could impact:
- Property investors
- Individuals holding long-term investments
- Trusts and partnerships
- Asset sale strategies
Investors in eligible new residential properties may also be able to choose between the current CGT discount or the new indexed method.
Proposed Negative Gearing Reforms
The Budget also announced proposed changes to negative gearing for residential property investments.
From 1 July 2027, losses from established residential properties may only be offset against:
- Rental income, or
- Capital gains from residential properties
Unused losses would be carried forward for future use.
The proposed changes are expected to apply to established residential properties acquired after 12 May 2026, while eligible new builds and some property structures may remain exempt.
These reforms could influence future investment strategies, particularly for investors considering established residential properties.
Changes to Discretionary Trusts
Another major proposal is the introduction of a minimum 30% tax on discretionary trusts from 1 July 2028.
Under the proposed rules:
- Trustees would pay a minimum 30% tax on trust income
- Beneficiaries would receive non-refundable tax credits
- Different treatment may apply to corporate beneficiaries
The Government has also proposed rollover relief to help businesses restructure from discretionary trusts into other entity types if required.
For many family businesses and investment structures, this may create a need to review current tax planning arrangements.
Tax Relief Measures for Individuals
The Budget includes several measures aimed at providing tax relief for individuals and working Australians.
Working Australians Tax Offset
A new $250 Working Australians Tax Offset is proposed from the 2028 income year for eligible workers and sole traders.
$1,000 Standard Deduction
From 1 July 2026, eligible taxpayers may be able to claim a standard deduction of up to $1,000 for work-related expenses without needing detailed substantiation.
Taxpayers with higher deductible expenses can still continue claiming actual expenses under the existing rules.
Income Tax Cuts
Previously announced tax cuts were also confirmed:
- The current 16% tax rate will reduce to 15% from 1 July 2026
- It will reduce again to 14% from 1 July 2027
The Government also announced increases to the Medicare levy low-income thresholds for singles, families, seniors, and pensioners.
Small Business Support Measures
The Budget included several announcements designed to support small businesses and improve cash flow flexibility.
Permanent $20,000 Instant Asset Write-Off
From 1 July 2026, the Government proposes making the $20,000 instant asset write-off permanent for eligible small businesses with turnover under $10 million.
This allows businesses to immediately deduct eligible asset purchases below the threshold instead of depreciating them over time.
Loss Carry Back Rules
Eligible companies may once again be able to carry back tax losses and offset them against taxes paid in previous years, helping improve cash flow during difficult periods.
PAYG Instalment Changes
From 1 July 2027, small and medium businesses may be able to opt into:
- Monthly PAYG instalments
- Real-time instalment calculations through accounting software
The changes are intended to better align tax instalments with actual business performance.
Start-Up Business Support
The Budget also proposes refundable tax offsets for eligible start-up companies generating losses during their first years of operation.
R&D and Innovation Incentives
The Government announced reforms to the Research & Development (R&D) Tax Incentive aimed at encouraging innovation while improving compliance.
Key proposed changes include:
- Higher offsets for core R&D expenditure
- Increased turnover thresholds for refundable offsets
- Expanded support for growing businesses
These reforms may benefit businesses investing heavily in innovation and technology development.
Electric Vehicle FBT Changes
The Budget also outlined future changes to the FBT concessions for electric vehicles.
From 1 April 2029, eligible electric vehicles will move to a permanent 25% FBT discount, replacing the current full exemption arrangements for some vehicles.
Businesses considering electric vehicle fleets should monitor how these changes may affect future tax outcomes.
What Businesses Should Do Next
While many of these measures are still proposals and subject to legislation, the Federal Budget signals important potential changes for:
- Business structures
- Property investment strategies
- Tax planning
- Cash flow management
- Payroll and compliance planning
Reviewing your current position early can help you prepare for future opportunities and obligations.
At Ceebeks Business Solutions, we’re helping businesses and individuals understand how these proposed changes may affect them and what steps they should consider next.
If you would like advice tailored to your business or investment situation, our team is here to help.
Read more of our daily blogs for valuable insights and stay up-to-date with the latest industry news – click here to access the full article on our blog page.
