HLB - Federal Budget 2026 – 27
By: HLB Mann Judd
Major changes requiring careful planning
Explore our Federal Budget 2026-27 Alert, a summary of the announcements related to personal and business taxation and superannuation.
On 12 May, Treasurer Jim Chalmers handed down his fifth Federal Budget
The 2026–27 Federal Budget focused on tax reform, housing affordability and cost-of-living support. Key measures included the confirmation of previously legislated personal income tax cuts from 1 July 2026 and 1 July 2027, alongside a new $250 Working Australians Tax Offset and a proposed $1,000 standard deduction for work-related expenses.
The Budget also introduced major proposed reforms to capital gains tax, discretionary trusts and negative gearing from 2027 onwards, aimed at reshaping investment and property taxation.
For businesses, the Government announced the permanent extension of the $20,000 instant asset write-off for small businesses, the return of the loss carry-back regime, and measures to simplify PAYG tax payments.
While no major new superannuation measures were announced, attention remains on the upcoming payday super reforms and the Division 296 tax regime for balances above $3 million.
HLB Mann Judd’s Federal Budget Alert provides a succinct summary of the announcements related to personal and business taxation, tax compliance and superannuation.
Contact our advisers should you wish to learn more or prepare for any matters which may affect your business or personal situation.
" The Combined removal of CGT discount, limits on negative gearing and a 30% minimum tax on discretionary trust income marks a structural shift that will force a complete rethink of traditional tax planning for those accumulating and preserving their wealth"
Partner, Tax Consulting & National Tax Committee Leader
Key Measures
PERSONAL TAX :
Personal tax rates: existing cuts for 2026–2027 and 2027–2028 unchanged
The Budget confirmed previously legislated personal income tax cuts from 1 July 2026 and 1 July 2027, alongside the introduction of a new $250 Working Australians Tax Offset from 1 July 2027.
It also proposed a simplified $1,000 standard deduction for work-related expenses from the 2026–2027 income year, aimed at reducing compliance for employees.
Additional measures included increases to Medicare levy low-income thresholds and changes to private health insurance rebates for Australians aged 65 and over.
BUSINESS MEASURES :
Backing business growth
Several measures were introduced to support small and medium businesses, including the permanent extension of the $20,000 instant asset write-off for businesses with turnover under $10 million.
The Government also announced the return of the loss carry-back regime from 1 July 2026 and new refundable tax offset measures for eligible start-up companies from 2028.
Additional reforms included expanded monthly PAYG instalment options and phased changes to the FBT exemption for electric vehicles.
MAJOR CGT, TRUSTS & NEGATIVE GEARING REFORMS:
Major changes announced
Significant proposed reforms to capital gains tax, discretionary trusts and negative gearing arrangements were announced, with changes set to commence from 1 July 2027 onwards.
Key measures include replacing the 50% CGT discount with inflation indexation and a proposed minimum 30% tax on capital gains, alongside a new minimum 30% tax on discretionary trust income from 1 July 2028.
The Government also proposed limiting negative gearing deductions to newly constructed residential properties, while generally grandfathering existing investments.
SUPERANNUATION:
No major superannuation measures announced
The Budget did not introduce any major new superannuation measures, with the focus remaining on previously legislated reforms due to commence from 1 July 2026.
Key upcoming changes include payday super requirements and the Division 296 tax on superannuation balances above $3 million.
It was confirmed that complying superannuation funds, including SMSFs, will continue to receive the existing CGT discount treatment.
