The May 2026-27 Federal Budget had more in it than most — and that’s an understatement. Treasurer Jim Chalmers has called it the most ambitious in decades, and while a lot of the coverage has focused on housing, the changes run much deeper than that.
We’ve pulled out what matters most for our clients. Some of it is good news. Some of it needs attention. All of it is worth understanding before the deadlines start to bite.
Personal tax: some genuine wins
From 1 July this year, most workers can claim a $1,000 deduction for work-related expenses without keeping a single receipt. That lands on top of the tax rate cut already locked in — the 16% rate on income between $18,210 and $45,000 drops to 15% this year, and again to 14% in 2027.
A new $250 Working Australians Tax Offset lands from 2027-28, adding another layer of relief for people who earn income from work. Not life-changing, but real money and worth factoring in.
Capital gains tax: the 50% discount is going
From 1 July 2027, gains will be taxed on an indexed basis with a 30% minimum rate applying to the real gain. Sell before that date and the existing rules apply in full. Hold assets past it and only the gain that builds up after 1 July 2027 is caught — everything you’ve accrued before then stays protected.
If you hold property, shares or land you’ve owned for many years, you’ll need a valuation at 1 July 2027 to set your new cost base. The ATO is expected to release further guidance on the process. While waiting for every detail may not be the best approach, it is important to scenario plan carefully and avoid rushing into action before the changes are fully legislated. If you’re buying into new residential property, you’ll get to choose which method applies when you sell.
Negative gearing: existing investors are protected
If you already own a negatively geared investment property, nothing changes. Whatever you held before 7:30pm on 12 May 2026 is fully protected.
For established residential properties bought after that point, losses will be quarantined against future property income rather than offset against wages or other income. New residential builds retain full negative gearing, as part of the Government’s push to encourage new housing supply. Commercial property and shares are unaffected.
Family trusts: this is the one to watch
From 1 July 2028, discretionary trusts will pay a minimum 30% tax on distributions. At the moment, trust income flows to beneficiaries at their individual tax rates — sometimes much lower. That’s what the Government is targeting.
If your trust holds primary production income specifically, that’s excluded from the minimum tax. That’s genuinely good news for farming families. But non-farming income held in the same trust is more complicated, and the Government is still clarifying the full details of how the rules will work in practice.
Rollover relief will be available from 1 July 2027 for those who want to restructure, but there’s planning involved, particularly where property or farming land is part of the picture. If you use a discretionary trust in any capacity, now is the time to have that conversation with your adviser to start planning and strategising, not as the deadline approaches.
Business measures: mostly good news
The $20,000 instant asset write-off is permanent from 1 July 2026. It’s been extended year by year since 2015, which made it hard to plan around. Now it’s locked in — if your turnover is under $10 million, you can buy equipment and infrastructure knowing the deduction is there without having to wait for each budget to confirm it.
Loss carry-back returns for companies with global turnover under $1 billion, allowing current year losses to be offset against tax paid in the previous two years and receive the difference as a refund. And early-stage start-ups — those in their first two years with turnover under $10 million — will have access to refundable losses from 2028-29 — if they’ve paid Pay As You Go Withholding (PAYGW) or Fringe Benefits Tax (FBT) during the loss year.
What to do now
These changes will land differently depending on your structure, assets, and setup. The full Budget summary steps through each measure in detail, and Simon, Ben and the team are across it all.
If you have questions about how any of this affects your situation, your trust, your investment property, your farm, or your business, please get in touch with the MBC team directly. These are not one-size-fits-all questions.
You can down our full budget overview here. Please get in touch with your account manager if you have any questions. We are here to help.
