2026 Australian Federal Budget: What It Means for Businesses, Investors & Individuals

The 2026–27 Federal Budget introduces some of the most significant proposed tax and wealth reforms Australia has seen in years.

It signals a broader shift in how Australia approaches:

• Wealth creation;
• Investment taxation;
• Superannuation;
• Property ownership; and
• Intergenerational wealth planning.

With a focus on easing cost-of-living pressures, supporting business growth, reforming tax settings and strengthening Australia’s long-term economic resilience, the Budget introduces a range of measures likely to impact Australian businesses, investors, and families over the coming years.

Key themes include housing affordability, tax reform, energy security, support for small business, and superannuation changes.

While several measures have passed into law, others remain proposed reforms and may evolve through consultation and legislation over the coming years.

Here’s a practical, simplified breakdown of the major announcements and what they could mean for Australian business owners, families and investors.

For Investors & Trustees

Major Changes to Negative Gearing

One of the most significant proposed reforms in this Budget is the overhaul of negative gearing arrangements.

From 1 July 2027:
• Negative gearing for residential property will be limited to new builds; and
• Existing residential properties purchased after Budget night may no longer allow losses to offset salary or other income.

Importantly: Properties already owned before 12 May 2026 are grandfathered under the current rules.

What this means:

• Existing investors are largely protected;
• Future property investment strategies may need reconsideration;
• New-build investments may become more attractive; and
• Portfolio diversification may become increasingly important.

This comes at a time when many Victorian investors and landowners are already navigating increased holding costs and evolving land tax settings.

Capital Gains Tax (CGT) Reform

The Government has also proposed CGT reforms from 1 July 2027.

Currently, individuals and trusts can generally access a 50% CGT discount on assets held longer than 12 months.

Under the proposed changes:
• The 50% discount would be replaced with indexed cost bases; and
• A minimum 30% tax rate would apply to capital gains.

These changes may impact:

• Long-term investors;
• Property owners;
• Family groups;
• Trustees; and
• Business sale strategies.

For many Australians who have built wealth through property and long-term investment growth, these changes could materially affect future planning outcomes.

30% Minimum Tax on Discretionary Trusts

From 1 July 2028, discretionary trusts may be subject to a minimum 30% tax on trust income.

The Government says this measure is aimed at reducing income-splitting opportunities and improving fairness within the tax system.

Exemptions include:

• Fixed trusts;
• Charitable trusts;
• Deceased estates;
• Super funds; and
• Some primary production income.

This matters because discretionary trusts remain one of the most commonly used structures for:
• Asset protection;
• Family wealth management;
• Investment ownership; and
• Succession planning.

As a result, many families and business owners may benefit from reviewing existing structures well before the proposed commencement date.

Venture Capital Incentives Expanded

The Government is increasing thresholds and caps for venture capital investment programs from July 2027.

This aims to encourage:
• Innovation;
• Start-up investment; and
• Australian business growth.

This may be particularly relevant for:
• Founders;
• Investors;
• Business owners; and
• Clients exploring alternative investment opportunities.

For Business Owners & Businesses

Permanent $20,000 Instant Asset Write-Off

The $20,000 instant asset write-off will become permanent from 1 July 2026 for businesses with turnover under $10 million.

This allows eligible businesses to immediately deduct assets costing under $20,000 rather than depreciating them over several years.

Potential benefits include:

• Improved cash flow;
• Simpler tax reporting; and
• Greater confidence to invest in business equipment and technology.

Make sure you discuss any purchases with your Aintree Group adviser before making a call!

Loss Carry-Back Returns

Companies with turnover under $1 billion will again be able to carry back tax losses against profits from earlier years from 1 July 2026.

This could provide valuable cash refunds for businesses experiencing slower trading periods or investing heavily in growth initiatives.

PAYG Instalments to Become More Flexible

From July 2027, businesses will be able to opt into monthly PAYG instalments using real-time accounting software calculations.

The aim is to better align tax payments with actual business cash flow and trading performance.

Research & Development (R&D) Tax Incentive Changes

The Budget proposes major reforms to the R&D Tax Incentive from 2028–29.

The Government plans to:
• Increase support for genuine core R&D activities;
• Simplify the system; and
• Expand eligibility for growing businesses.

This is likely to be particularly relevant for:
• Technology businesses;
• Manufacturing;
• Innovation-focused companies; and
• Scaling enterprises.

Electric Vehicle (EV) FBT Changes

The current electric vehicle Fringe Benefits Tax (FBT) exemption will gradually transition to a permanent 25% FBT discount from April 2029.

In practice:

• EVs under $75,000 largely retain the current exemption until 2029;
• Higher-priced EVs may become less tax-effective;
• Businesses reviewing vehicle and fleet strategies may wish to act sooner rather than later.

Payday Super Will Change Payroll Processes

From 1 July 2026, employers will need to pay superannuation at the same time as wages.

While positive for employees, this may require businesses to review:
• Payroll systems;
• Cash flow management; and
• Accounting software processes.

Proactive action is important for this one – so make sure you’re across all the finer details!

We’ve explored Payday Super in more detail below, including what the changes may mean for employers, payroll systems, and cash flow management:

Crackdown on Tax Fraud & Compliance

The ATO will receive additional funding and expanded powers to improve fraud detection and increase compliance activity across tax and super systems.

Businesses and investors can likely expect:
• Stronger oversight;
• Increased data matching; and
• Greater scrutiny of reporting obligations moving forward.

For Superannuation & Retirement Planning

Division 296 Super Tax Changes

The (somewhat) controversial Division 296 measures have now passed into law.

In a nutshell…

From 2026–27:
• Super balances above $3 million will face additional tax rates;
• Higher effective rates will apply to balances above $10 million.

This may impact:

• High-balance SMSFs;
• Wealth accumulation strategies;
• Retirement planning; and
• Estate planning outcomes.

This is a complex subject, and we recommend referring to more detailed resources, and getting individual advice from your Aintree Group adviser.

For a deeper breakdown of Division 296 and potential generational wealth implications, explore our insights below:

Low Income Super Tax Offset (LISTO) Threshold Increased

Low-income earners will benefit from increases to the Low Income Super Tax Offset (LISTO) from 2027–28, helping eligible Australians build stronger retirement savings.

The income threshold will increase from:
• $37,000 to $45,000.

While the maximum offset will increase from:
• $500 to $810.

The LISTO refunds tax paid on concessional super contributions for eligible low-income earners and is paid directly into an individual’s super fund automatically.

Super Fund Governance & Investor Protection

The Government will continue consulting on:
• Super fund performance testing;
• Managed investment scheme regulation; and
• Broader governance reforms.

For those with self-managed super funds (SMSFs), family investment structures, or complex wealth arrangements, these changes also reinforce the importance of:
• Regular investment reviews;
• Appropriate governance processes;
• Clear documentation and compliance practices; and
• Ensuring investment strategies remain aligned with long-term objectives.

While many of these reforms are still evolving, the broader direction is clear — increased accountability, stronger regulatory oversight, and greater emphasis on performance and investor protection across the superannuation and investment landscape.

For Families & Individuals

Housing & First Home Buyer Support

The Budget continues the Government’s focus on housing affordability through:
• The 100,000 Homes for First Home Buyers initiative;
• Expanded 5% deposit schemes;
• Broader housing supply measures.

HELP Debt Relief

Previously announced HELP debt reforms are now law, including:
• A one-off 20% reduction in outstanding HELP debt balances;
• Higher repayment income thresholds; and
• A new repayment system designed to reduce pressure on lower and middle-income earners.

The 20% reduction was automatically applied to HELP balances before indexation.

For example:
• A $20,000 HELP debt reduced to $16,000.
• A $50,000 HELP debt reduced to $40,000.

The minimum repayment threshold has also increased from $54,435 to $67,000 for the 2025–26 financial year.

Repayments will now operate more like income tax brackets, meaning borrowers only repay a percentage on income earned above the threshold, rather than on their entire salary.

New $250 Working Australians Tax Offset

From the 2027–28 financial year, eligible workers will receive a new annual $250 tax offset aimed at providing additional cost-of-living relief for working Australians.

The offset will apply automatically through the tax system and is expected to benefit more than 13 million taxpayers.

While full eligibility details are still being finalised, the measure is intended to support:
• Employees;
• Sole traders;
• Lower and middle-income earners; and
• Australians facing increasing living and housing costs.

Unlike a tax deduction, a tax offset directly reduces the amount of tax payable, potentially increasing annual tax refunds or reducing overall tax liabilities.

$1,000 Instant Tax Deduction

From the 2026–27 financial year, workers may be able to claim a standard $1,000 deduction for work-related expenses without needing receipts or itemised claims.

The measure is designed to simplify tax return preparation and reduce record-keeping requirements for millions of Australians.

Importantly:
• Taxpayers can still choose to claim actual work-related expenses if they exceed $1,000;
• Those claiming more than $1,000 will still need appropriate records and substantiation.

Medicare Levy Thresholds Increased

Low-income Medicare levy thresholds have increased from 1 July 2025. Meaning, more Australians may pay a reduced Medicare levy, or avoid paying it altogether.

The updated thresholds apply to:
• Individuals;
• Families;
• Pensioners; and
• Seniors eligible for the SAPTO offset.

The changes are designed to ensure lower-income Australians are not pushed into paying the levy purely due to inflation or wage growth, providing modest additional cost-of-living relief for eligible households.

Private Health Insurance Changes

From April 2027, the Government will remove the age-based increase to the Private Health Insurance Rebate.

Currently, older Australians receive higher rebate percentages to help offset rising private health insurance costs. Under the proposed changes, rebate rates will instead be standardised across age groups.

The Government says savings from the reform will be redirected into:
• Aged care services;
• Home care support; and
• Broader healthcare initiatives.

While the changes are not immediate, they may impact long-term healthcare planning and out-of-pocket insurance costs for older Australians over time.

Fuel Relief Measures

To provide short-term cost-of-living relief, fuel excise was temporarily reduced by 32 cents per litre for three months from April 2026.

This measure was designed to provide short-term relief amid ongoing cost-of-living pressures.

The Government also temporarily reduced heavy vehicle road user charges during the same period to help ease broader transport and freight costs.

Women’s Safety & Economic Security Funding

The Budget includes continued funding aimed at improving women’s safety, financial security, and access to support services, building on more than $4 billion committed since 2022 under the National Plan to End Violence Against Women and Children

Key areas of investment include:
• Family violence prevention and frontline support services;
• Women’s healthcare initiatives;
• Housing and homelessness support;
• Workplace protections and economic participation; and
• Stronger child support enforcement measures.

The funding forms part of the Government’s broader strategy to improve long-term safety, financial independence, and economic outcomes for women and families across Australia.

Strategic Planning Considerations

It’s important to keep in mind that many of the most significant Budget measures remain proposals and are not yet law, particularly changes related to negative gearing, CGT reform and discretionary trust tax.

These reforms are likely to generate significant debate over the coming years. So, don’t get stuck in the details on these matters just yet. As always, the devil is in the details, and those can and likely will change between now and when they take effect.

This year’s Federal Budget also signals a broader shift toward increased scrutiny of wealth structures, investment taxation, and long-term tax planning, reinforcing the importance of proactive structuring and succession planning.

This could have significant implications for:
• Estate planning;
• Intergenerational wealth transfer;
• Tax efficiency;
• Asset protection strategies.

For business owners, trustees, investors, and families, now is an ideal time to review:
• Investment strategies;
• Ownership structures;
• Wills and estate plans;
• Succession planning strategies; and
• Long-term wealth objectives.

At Aintree Group, our integrated Wealth, Accounting, Legal, and Advisory teams work collaboratively to help clients structure, protect, and transition wealth. Ensuring investment, tax, business, and estate planning strategies remain aligned as circumstances evolve.

This is general information only and has not been prepared with your personal objectives, financial situation, or needs in mind. Professional advice should be sought before acting on any information contained in this article.