Every Federal Budget brings new rules that can affect your tax, super, investments and long-term financial plans. Some changes are small. Others can shape the decisions you make over the next decade or more.
The 2026–27 Federal Budget includes several updates worth paying attention to, especially if you own property, run a business, invest through a trust, contribute to super or you’re planning for retirement.
With some measures already in effect from 1 July 2026 and others still proposed, the key is knowing what matters now and what may need planning ahead.
Here are 9 Federal Budget changes that could affect your financial plan.
1. Negative gearing will be limited to new builds
Negative gearing was one of the biggest talking points from this year’s Budget.
If you’re not familiar with it, negative gearing is when an investment property costs more to hold than it earns in rent. In many cases, that loss can be used to reduce your taxable income.
Under the proposed changes, negative gearing for residential property will be limited to new builds from 1 July 2027. Existing investments held before 7:30pm AEST on 12 May 2026 will be exempt.
If you buy an established residential property after that time, you won’t be able to use those losses to reduce tax on your wages or other income straight away. Instead, they’ll generally need to be carried forward and used later.
The reason? The Government wants more investor money going into new homes, not just existing homes changing hands. Over time, that could also mean less investor competition for established homes, which matters if you’re trying to buy your first place.
If you’re thinking about buying an investment property, this changes the numbers. Established properties lose some of their tax appeal, while new builds become more attractive.
2. Capital gains tax will move from a discount to inflation
The other major talking point from the Budget was capital gains tax, or CGT.
CGT is the tax you pay when you sell an asset for more than you bought it for. This can include investment properties, shares, managed funds and other assets.
From 1 July 2027, capital gains will be subject to a 30% minimum tax rate. The 50% CGT discount for assets held longer than 12 months will also be replaced with cost base indexation.
In simple terms, when you sell the asset, your original purchase price is adjusted for inflation before tax is calculated. You’re then taxed on the gain above inflation, rather than simply cutting the taxable gain in half.
These changes affect investments held by individuals, trusts and partnerships. There’s no change to the main residence exemption or the existing small business CGT concessions. Investors who buy new residential properties can still choose between the existing 50% CGT discount and the new inflation-based method.
If you own investments, this change show future capital gains are taxed from 1 July 2027. The impact depends on how long you hold the asset, how much it grows and what inflation looks like over that period.
3. Minimum 30% tax rate for discretionary trusts
Discretionary trusts are often used by business owners, investors and families to help with income distribution, asset protection, estate planning and passing wealth through the family.
Under the Budget changes, discretionary trusts will face a minimum 30% tax rate from 1 July 2028, with some exceptions. Rollover relief will also be available for 3 years from 1 July 2027 to help small businesses and others restructure if needed.
If your trust is mainly used to distribute income to lower-tax family members, this change matters. It reduces some of that tax benefit.
That doesn’t mean it’s suddenly useless. Trusts can still be valuable for asset protection, estate planning and business succession. But if tax planning is one of the main reasons you use a trust, this is one to watch.
4. Super contribution caps have increased
The Budget didn’t announce major new superannuation changes. However, from 1 July 2026, some important super caps have increased:
● The concessional contributions cap has increased from $30,000 to $32,500
● The non-concessional contributions cap has increased from $120,000 to $130,000.
Put simply, you can now add a little more to your superannuation if you have the money available. That’s useful if you have received a bonus, sold an asset, built up extra savings or want to give your retirement savings a boost.
If you’re younger, this probably won’t feel urgent. But time is one of the biggest advantages you have, and even small extra contributions can grow into something meaningful over the years.
5. The $20,000 instant asset write-off is becoming permanent
If you run a small business, this is one of the more practical Budget changes.
From 1 July 2026, the Government will make the $20,000 instant asset write-off permanent. If your business is eligible, you can immediately deduct business assets costing less than $20,000. This includes things like equipment, tools, computers, office furniture or machinery.
Making the write-off permanent gives you more certainty when planning future purchases. But the purchase still needs to make commercial sense. A tax deduction can help with cash flow, but it’s not a reason to spend money on something your business doesn’t need.
6. The 16% tax rate has dropped to 15%
Some personal income tax cuts have already started.
From 1 July 2026, the 16% tax rate on taxable income between $18,201 and $45,000 dropped to 15%. From 1 July 2027, it’s scheduled to drop again to 14%.
The Government says every Australian taxpayer will receive a tax cut of up to $268 from 1 July 2026, then up to $536each year from 1 July 2027, compared with 2024–25 tax settings.
You might not notice a huge difference in your take-home pay. But it’s still money back in your pocket.
The trick is to have a plan for it, so it doesn’t disappear. You could put a little more towards your mortgage, emergency fund, super, investments or personal debt.
7. A $1,000 standard tax deduction
The Budget includes a proposed $1,000 standard deduction for eligible work-related expenses.
Right now, if you want to claim work expenses, you generally need to add them up and keep records to support the claim. Under the proposed change, if your work-related expenses are fairly small, you’d be able to claim a standard deduction of up to $1,000 instead.
The Government says this will benefit 6.2 million workers, with an average tax saving of $205 for 2026–27.
The key point is this: it doesn’t mean you get a $1,000 refund. A deduction reduces your taxable income, so the actual saving depends on your tax rate.
It also doesn’t mean receipts no longer matter. If your work-related expenses are more than $1,000, you’ll still need records to support your claim.
So yes, tax time becomes simpler. But don’t throw your receipts away just yet.
8. A new $250 tax offset
The Government has proposed a new Working Australians Tax Offset (WATO).
From the 2027–28 income year, eligible workers would receive an annual tax offset of up to $250. The Government says this will benefit more than 13 million people.
Again, $250 is not going to change your life. But with household costs still high, it’s better in your pocket than not.
When combined with tax cuts and better cash flow habits, small amounts like this still help you move in the right direction.
9. Medicare levy thresholds have increased by 2.9%
The Budget has also increased the Medicare levy low-income thresholds for singles, families, seniors and pensioners.
The thresholds rose by 2.9%, which means you may pay less Medicare levy, or avoid paying it altogether, if your income is close to the relevant cut-off point.
For most people, the savings will be modest. But every bit of breathing room helps.
What these Budget changes could mean for your financial plan
Budget announcements can make it feel like you need to act straight away. Most of the time, you don’t.
The better starting point is to workout which changes apply to you, which ones are still proposed and which ones need planning ahead.
Depending on your situation, it’s worth reviewing:
● Your property cash flow before buying another investment
● Whether your family trust still makes sense
● Your super contribution strategy
● Where extra tax savings should go
● Future business purchases under the instant asset write-off
● Your retirement plan if you hope to finish work in the next few years.
The main point is this: don’t make decisions based on Budget headlines alone. Your next step should depend on your personal situation and goals instead.
How Poole Advisory can help
At Poole Advisory, we help you understand how Budget changes like these fit into your broader financial plan. That may include investment advice, superannuation or SMSF advice, retirement planning, cash flow management, business planning and estate planning.
Get in touch with us or book an Introduction Meeting to talk through your next steps.
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This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns.
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