Federal Budget Breakdown: The Treasurer didn’t disappoint.
Last night’s Federal Budget delivered one of the biggest shake-ups to Australia’s tax settings in decades. The headline measures target housing affordability and perceived inequities in investment structures, while also offering targeted cash‑flow and innovation support for business. Below is our high-level overview of the changes most likely to matter to you and what to do next as the detail emerges.
The Budget at a Glance
Housing tax reform (from 1 July 2027)
Discretionary trusts (from 1 July 2028)
Business cash‑flow (from 1 July 2026)
Innovation settings (mainly from 1 July 2027–2028)
Breaking down the big ticket items
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Sweeping Proposed Reforms to Negative Gearing and CGT
Read the articleFrom 1 July 2027, the Government plans to limit negative gearing on residential property to new builds (with existing holdings grandfathered). It has also flagged changes to the 50% CGT discount, moving instead to cost base indexation and a 30% minimum tax rate on real (inflation‑adjusted) capital gains.
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Reforming Loss Refundability for Businesses
Read the articleThe Budget proposes two measures to make business losses more immediately useful: a permanent 2-year loss carry back for eligible companies, and a new refundable offset for small start-up companies. Together, these measures are aimed at improving cash flow, supporting risk-taking and reducing the tax system’s bias against loss-making growth phases.
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FBT and Electric Vehicles
Read the articleThe Federal Government has announced changes to the Fringe Benefits Tax (FBT) concessions for electric vehicles (often accessed via novated leases). In short, the current full FBT exemption will be wound back over time and replaced with a permanent 25% FBT discount for most eligible electric cars from 1 April 2029.
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Major Trust Tax Shake-Up
Read the articleThe Government has announced a new 30% minimum tax for discretionary trusts, proposed to start from 1 July 2028. If implemented, the trustee would pay the minimum tax upfront, and eligible beneficiaries would generally receive a credit to help avoid double taxation.
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Making Tax Simpler for Business
Read the articleWhat’s Changing: $20,000 instant asset write‑off to be locked in. Simplified depreciation “lock‑out” rules stay on hold (for now). PAYG instalments: moving closer to real‑time. Read our full budget analysis series.
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R&D Tax Incentive Shake‑Up
Read the articleThe Government has announced proposed reforms to the Research and Development Tax Incentive (RDTI). Broadly, the measures are intended to focus support more directly on core experimental R&D, while reshaping eligibility settings and refundability outcomes for some businesses.
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Venture Capital Tax Incentive Reforms
Read the articleFrom 1 July 2027, key thresholds for venture capital limited partnerships (VCLPs) and early stage venture capital limited partnerships (ESVCLPs) will increase, broadening the range of investee businesses and fund structures that can access concessional tax treatment.
What should you do next?
Take a breath, digest the changes, seek advice.
- Don’t rush into restructures. Most measures require legislation and the design details (definitions, exclusions and integrity rules) will drive real outcomes.
- Model the change. If you have a discretionary trust, investment property, significant unrealised gains, or an upcoming business exit, a simple scenario model can identify where the pressure points are.
- Review holding structures. Consider whether current structures still fit your goals (cash‑flow, asset protection, succession, and now after‑tax investment returns).
- Get your data ready. For businesses, tax forecasting, franking positions, payroll/PAYG settings and R&D documentation will be the practical foundation for decision‑making as legislation lands.
- Talk to us early. We’ll be tracking draft legislation and consultation outcomes and can help you prioritise what matters for your circumstances. Get in touch via the form below to speak with an advisor.
