The 2026–27 Federal Budget introduced several proposed tax and investment reforms that could affect workers, investors, retirees and business owners over the coming years. While some measures are designed to provide short-term tax relief, others may significantly reshape how Australians approach property investing, capital gains and wealth structuring.
Many of the proposed changes are not scheduled to begin until 2027 or later. Even so, investors and higher-income households are already reviewing strategies around asset sales, trust structures and long-term financial planning.
Understanding how these measures may apply personally is becoming increasingly important, particularly for Australians managing investment properties, share portfolios or family wealth structures. Reviewing these changes as part of a broader retirement planning strategy may help households prepare for future tax and investment conditions.
Personal tax changes explained
The Budget included several measures aimed at simplifying tax returns and providing additional tax relief for working Australians.
One of the headline announcements was a proposed $1,000 instant tax deduction for work-related expenses, available from the 2026–27 income year. Eligible workers can claim up to $1,000 without needing receipts or detailed substantiation. Those with expenses above $1,000 can still claim the higher amount the usual way.
The Government also introduced the proposed Working Australians Tax Offset (WATO), a permanent annual $250 tax offset for eligible workers from 1 July 2027. Nearly all (97%) of the more than 13 million Australian workers who qualify are expected to receive the full offset.
These changes may create opportunities for some households to revisit:
- Salary sacrifice arrangements
- Superannuation contribution strategies
- Cash flow planning
- Tax-deductible expenses
- Transition to retirement planning strategies
People already working with a financial planner may also wish to review whether these changes create opportunities to improve long-term tax efficiency.
The proposed Capital Gains Tax changes
One of the most significant proposed reforms relates to capital gains tax (CGT). Under current rules, eligible assets held for more than 12 months can generally access a 50% CGT discount. The Budget proposes replacing that discount for individuals, trusts and partnerships with a CPI-linked cost base indexation method and a 30% minimum tax on capital gains from 1 July 2027.
Under the proposed reforms, the changes would apply only to gains accruing after 1 July 2027 rather than retrospectively. They would affect a range of investment assets including:
- Shares
- Investment properties
- Trust-held assets
- Partnership-held assets
The family home would remain exempt from CGT under the proposed rules.
Superannuation funds, including self-managed super funds (SMSFs), are also explicitly excluded from the CGT changes. The existing one-third CGT discount and 15% tax rate on fund income continue to apply within super, which is prompting some investors to review whether holding certain assets inside superannuation remains a tax-effective long-term strategy.
The impact on investors may vary depending on:
- The size of unrealised gains
- How long assets have been held
- Future investment returns
- Marginal tax rates at the time of sale
- Whether disposals occur before or after July 2027
Investors with large unrealised gains may wish to review whether planned disposals should occur before the proposed commencement date. Reviewing asset sales as part of a broader financial planning strategy may help investors think through potential tax outcomes before the proposed rules begin.
Negative gearing reforms and property investors
The Budget also included major proposed changes to negative gearing arrangements for residential property. From 1 July 2027, negative gearing benefits for residential investment properties would generally be limited to newly constructed dwellings that genuinely add to housing supply.
Properties purchased between the Budget announcement and 30 June 2027 will continue to access negative gearing during that period, but not after 1 July 2027. Properties purchased from 1 July 2027 will not be negatively geared. In both cases, losses that cannot be offset against other income can be carried forward to offset future residential property income or capital gains.
Properties already owned before the Budget announcement would continue under existing arrangements.
The reforms are intended to improve housing affordability and increase owner occupier participation over time.
The proposed changes may influence:
- Future property investment decisions
- Borrowing strategies
- Portfolio diversification
- Retirement planning decisions
- Cash flow modelling
Commercial property investments would remain under existing negative gearing arrangements.
The same carve-out applies to superannuation funds, including SMSFs – the negative gearing changes do not affect them. This means rental income and losses inside super continue to be treated under the existing super tax framework, unaffected by the Budget reforms.
Trust changes and restructuring considerations
The Budget included one of the most significant structural changes to trust taxation in decades. From 1 July 2028, a 30% minimum tax will apply to the taxable income of discretionary trusts at the trustee level.
Under the proposed rules, trustees pay 30% tax on taxable income before distributions are considered. Beneficiaries on higher marginal tax rates may still pay additional tax, while beneficiaries on lower tax rates may lose the benefit of excess credits.
Trust structures will still have legitimate uses for asset protection, succession planning and estate management, but the tax effectiveness of income splitting may be reduced.
Several trusts are exempt from the measure, including fixed trusts, widely held trusts, charitable trusts, complying superannuation funds and deceased estates. Three years of rollover relief will also be available from 1 July 2027 for some restructuring arrangements.
Restructuring is not suitable in every situation. Changes to ownership structures can create tax and estate planning consequences, making professional advice important before decisions are made. A financial planner or accountant may help families assess whether existing structures still align with long-term wealth and retirement planning goals.
That is what allows retirement to feel more stable, even when external conditions are not.
Why the structure of the advice relationship matters
Not all advice is delivered in the same way, and the structure behind the advice can shape the outcome.
RFS Advice is owned by its team, not a large institution, with all advisers holding equity in the business. That matters because it removes external pressures that can influence decision-making.
The firm also maintains an average team tenure of eight years, which provides continuity for clients. Over time, that consistency allows for a deeper understanding of each client’s situation and a more tailored approach to planning.
Growth is also intentional. Rather than acquiring other businesses or pursuing rapid expansion, the firm works with a defined group of clients, often introduced through referrals from existing clients or professional networks.
This creates a different dynamic. The focus remains on long-term relationships rather than transactional interactions.
What different taxpayers may want to consider now
The proposed reforms are still subject to legislative processes, but many Australians are already reviewing long-term financial planning strategies.
Investors with shares or investment assets
Investors with large unrealised capital gains may wish to review whether any planned disposals should take place before 1 July 2027, when the new CGT rules are scheduled to begin.
That said, tax considerations are only one part of the equation. Investment decisions should still reflect broader financial goals, diversification, income needs and long-term wealth objectives.
It is also worth noting that superannuation funds, including SMSFs, are explicitly excluded from both the new CGT rules and the negative gearing changes. For some investors, this makes reviewing superannuation contribution strategies and asset allocation within super an important part of the broader planning conversation.
Those with discretionary trusts
Families and business owners using discretionary trusts should speak to an adviser about whether restructuring makes sense before the proposed 30% minimum tax takes effect on 1 July 2028.
Early planning may provide greater flexibility and more time to consider different options carefully.
All taxpayers
The personal tax changes create opportunities from 1 July 2026. The $1,000 instant deduction is expected to apply from the 2026–27 tax year, while the $250 WATO is proposed to begin from 1 July 2027.
It is worth understanding the broader opportunities around:
- Tax cuts and offsets
- Deduction opportunities
- Superannuation contribution strategies
- Salary packaging arrangements
- Retirement cash flow planning
Discussing these opportunities with a Gold Coast financial adviser may help households better understand how the proposed changes fit within broader financial planning objectives.
How RFS Advice helps with financial planning
Tax and investment rules can change significantly over time, particularly around retirement, wealth creation and intergenerational planning. Early planning often provides more time to assess opportunities and risks before major policy changes take effect.
RFS Advice works with individuals, families and business owners navigating changing tax rules, retirement planning decisions and broader wealth strategies. If you are reviewing investment structures, preparing for retirement or trying to understand how the proposed budget changes may affect your financial position, contact RFS Advice for personalised guidance from an experienced financial planner.
Frequently asked questions
The proposed reforms are scheduled to apply to capital gains accruing from 1 July 2027. Investors reviewing asset sales as part of their broader financial planning strategy may wish to seek advice well before the proposed commencement date.
Properties already held at 7:30pm AEST on 12 May 2026 are grandfathered and can continue to negatively gear under existing arrangements for as long as they hold the property. Investors doing retirement planning may still wish to review how future property purchases could be affected.
Yes. The proposed changes are focused on residential investment properties. Commercial property investments would remain under existing arrangements.
Not necessarily. Decisions about selling investments should consider broader financial goals, tax implications, market conditions and long-term strategy. Speaking with a financial planner may help investors assess whether proposed tax changes alter existing plans.
No. Both the proposed CGT changes and the negative gearing reforms explicitly exclude superannuation funds, including self-managed super funds (SMSFs). The existing tax treatment inside super – a 15% tax rate on fund income, and the one-third CGT discount on assets held longer than 12 months – remains unchanged. For some investors, this makes reviewing the role of superannuation in their broader investment strategy an important consideration, particularly as the tax treatment of assets held outside super changes from 1 July 2027.
Potential changes to tax treatment and income distribution rules are prompting some investors and families to review whether existing trust structures remain appropriate for future planning needs. A Gold Coast financial adviser may help families understand how the proposed trust reforms could affect long-term financial planning and wealth management strategies.
General advice warning:
The information and any advice provided in this article has been prepared without taking into account your objectives, financial situation or needs. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things.
