13/05/2026
There were plenty of tax announcements in last night's budget. If they're all passed as law, and there's no guarantee they will be, there'll be some significant changes. Fortunately, most of them start in the future and have not been backdated. Many changes won't start for a year or more. This means the most important thing is planning and discussions. In many cases, any negative effects of these changes can be minimised with careful planning.
Here's some of the major tax changes:
• Cuts to personal tax rates announced in previous budgets will go ahead, together with further tax cuts and rebates, and a standard $1000 work related expense deduction, in future years.
• Small Business $20,000 Instant Asset Write-Off has been made permanent, instead of ending 30th June 2026.
• Negative gearing rules change for new properties bought after the budget. In most cases the rental losses can’t be claimed, and are carried forward to offset future rental profits. Existing properties, and newly built houses, can continue to use negative gearing.
• The way Capital Gains Tax is calculated will change from 1st July 2027 with the 50% discount replaced by an indexation calculation, and a minimum 30% tax rate on the taxable gain. There are some transitional rules and exemptions for existing assets and newly built houses, and taxpayers who receive a some income support payments such as the Aged Pension. In most cases, this will mean if you sell an asset that has increased by more than inflation, you will pay more CGT than you would have under the system that has been in place since 1999.
• Pre 20th September 1985 assets which are currently exempt, will be subject to CGT when sold after 1st July 2027. CGT will apply only on the increase from what the asset was worth on 30th June 2027, so any gain until then remains tax free.
• From 2028/29, most trust distributions will attract a minimum 30% tax rate, paid by the trustee before making the distribution to beneficiaries. This will particularly affect clients who were making distributions from their trust to beneficiaries who earned under $45,000.
• Loss Carry Back rules will be re-introduced from 2026/27. This means if a company pays tax, but then makes a loss in a later year, you can use the losses to get a refund of tax paid in previous years. From 2028/29, there are extra loss carry back incentives for new start up companies.
• Super Funds are largely exempt from the above changes.
