The winners
All workers — $1,000 instant deduction from 2026–27
Every employed Australian will be able to claim a $1,000 work-related deduction without receipts from the 2026–27 income year. No documentation required. At a 32.5% marginal rate, that's $325 back in your pocket automatically.
Small business — permanent loss carry-back with cash refunds
Small businesses in a loss position can now permanently carry losses back against prior year profits and receive a cash tax refund. This removes the "use it or lose it" problem that previously made losses far less valuable for small operators.
New businesses — FBT and PAYGW refunds during loss years
New businesses in their early years — often burning cash before profitability — can now reclaim FBT and PAYGW paid during loss years. A meaningful cash flow improvement for startups and early-stage operators.
EV drivers — extended FBT exemption and new discounts
The FBT exemption for eligible electric vehicles has been extended, and new discount structures apply from 1 April 2027. If your business or employer runs a novated lease, the numbers just got more attractive.
Superannuation — concessions unchanged
Despite pre-budget speculation, the Government left super tax concessions alone. The 15% concessional rate inside super remains intact. Contribution strategies are unaffected.
The losers
New property investors — negative gearing ring-fenced from 1 July 2027
Negative gearing losses on new property investments acquired from 1 July 2027 will be ring-fenced — deductible only against income from that investment, not your salary. Existing properties are grandfathered. If you're considering buying an investment property, the timing matters.
Capital gains — 50% discount removed for new assets
The 50% CGT discount will no longer apply to assets acquired from 1 July 2027. Assets already held retain the discount on gains accrued to that date. This is a significant change for long-term investors — the after-tax return on new investments just got worse.
Discretionary trusts — 30% minimum tax on all distributions from 1 July 2028
A 30% minimum tax will apply to all discretionary trust distributions from 1 July 2028. Income-splitting to lower-income beneficiaries — a core reason many family trusts exist — becomes significantly less effective. Existing structures should be reviewed well before this date.
Income splitting — substantially curtailed
Combined with the trust distribution changes, the budget effectively winds back many of the structural advantages that made trust-based business and investment planning attractive. The window to use these strategies is narrowing.
Key dates
| Date | What changes |
|---|---|
| 1 April 2027 | EV FBT exemption changes and new discount structures begin |
| 1 July 2027 | Negative gearing ring-fenced for new investment properties. CGT 50% discount removed for new assets. $1,000 instant work deduction commences. |
| 1 July 2028 | 30% minimum tax on all discretionary trust distributions takes effect |
Important note on legislative detail
Several of these measures are announced policy only. The legislation has not yet been introduced to Parliament. Confirm the current position before making major decisions — details may change as bills are drafted.
What to do now
The changes coming in 2027 and 2028 give you time — but not unlimited time. Here's where to focus:
- If you're considering buying an investment property, model the numbers both pre- and post-1 July 2027 before deciding timing
- If you hold assets with large unrealised gains, review whether crystallising before 1 July 2027 makes sense given the CGT discount removal
- If you operate through a discretionary trust, start modelling the impact of the 30% minimum distribution tax on your after-tax position from 2028
- If you're in business through a trust, explore whether the structure remains optimal or whether restructuring before 2028 is worth considering
- If you're employed, the $1,000 instant deduction is automatic from 2026–27 — no action needed, but you may still benefit from claiming more if your actual work expenses exceed $1,000