None of these measures are law yet, but the direction of travel is now clear, and the runway for thoughtful planning is finite.
What follows is a clear-eyed read of what the Budget actually proposes, what it leaves alone, and where Perth business owners, property investors and family groups should be focusing their attention over the next twelve to twenty-four months. We won’t bury you in policy jargon — but we will name the things most of the commentary is glossing over.
- The Big Three — what’s actually changing
- What else is worth knowing
- So what do you do now?
Three reforms sit at the centre of this Budget. Together, they represent the most significant shift in how Australia taxes business wealth, investment assets and intergenerational structures in a generation.
A 30% Minimum Tax on Discretionary Trusts
From 1 July 2028The long-standing ability to distribute trust income across family members to manage your effective tax position is being wound back. From mid-2028, discretionary trusts will be subject to a 30% minimum tax rate on distributed income — bringing them closer to corporate beneficiary treatment and removing much of the marginal-rate arbitrage that has shaped family group planning for decades.
Most of the commentary has stopped there. The detail worth holding onto is in the carve-outs:
Excluded categories: Primary production income, testamentary trusts, special disability trusts, complying superannuation funds, and income flowing from deceased estates. If your trust sits in one of these categories, your position may be more protected than the headlines suggest.
The Government has also built in three years of rollover relief from 1 July 2027 — designed to let existing structures reorganise without triggering immediate CGT or stamp duty consequences. That window matters. It means there is time to plan rather than panic.
What is required is a clear-eyed review of your current structure — and a forward-looking conversation about whether it still serves your goals.
The End of the 50% CGT Discount
From 1 July 2027Since 1999, the 50% capital gains discount has been a cornerstone of wealth-building strategy in Australia. From 1 July 2027, it is proposed to be replaced by a cost base indexation regime and a 30% minimum tax on net capital gains.
In practical terms, indexation will allow you to uplift the cost base of a long-held asset for inflation, reducing the nominal gain — but the after-tax outcome for many assets, particularly those acquired in the last decade of low inflation, will still be materially worse than the current discount delivers.
This affects individuals, trusts and partnerships holding investment property, commercial real estate, business assets, farm and vineyard holdings, and practice or partnership equity.
Meaningful carve-outs: Superannuation funds remain on their existing concessional CGT treatment, the small business CGT concessions are preserved, the main residence exemption is untouched, and new residential builds retain the 50% discount as an explicit incentive for housing supply.
Gains crystallised before 1 July 2027 still attract the existing 50% discount. That is not — and should not be read as — a green light to sell prematurely. What it does create is a case for getting your valuations right, modelling your timing options properly, and building succession and transfer strategies that work with the new landscape rather than against it.
Negative Gearing Restricted on Established Residential Property
From 1 July 2027For established residential property purchased after 12 May 2026, net rental losses will be quarantined — deductible only against residential property income, not against your salary, business income or other investment income. Excess losses carry forward indefinitely rather than disappearing, but the immediate annual tax benefit is gone.
What this does NOT touch: Negative gearing on shares, managed funds, commercial property and business investments is unchanged. Existing residential holdings (acquired on or before 12 May 2026) are grandfathered. New builds, widely held trusts, complying super funds and build-to-rent developments are all excluded.
This is a meaningful reshape of the residential investment calculation. It also materially lifts the relative attractiveness of new residential builds — worth weighing carefully if development, construction or property investment forms part of your business model.
R&D Tax Incentive Reform
From 1 July 2028Higher offset rates for core R&D activity, a lower intensity threshold (dropping from 2% to 1.5%), and a refundability cap targeted at companies under ten years old. If you’re in advanced manufacturing, agtech, medtech, defence supply chains or software, this is a planning conversation worth having early — both to capture the uplift and to manage the cap.
$20,000 Instant Asset Write-Off — Now Permanent
From 1 July 2026Small businesses with turnover under $10 million can permanently deduct the full cost of eligible assets under $20,000. After years of annual extensions and last-minute legislative scrambles, this finally moves from a political football to a planning certainty — particularly useful for trades, transport, professional services and primary production.
Loss Carry-Back for Companies — Made Permanent
OngoingFor companies under $1 billion in turnover, the ability to carry tax losses back against prior-year profits is now a permanent feature of the system. A genuinely useful structural improvement for businesses investing heavily in growth, navigating a cyclical downturn, or absorbing one-off losses on a project.
Electric Vehicle FBT Exemption — Continues to 2029
Extended to 2029The FBT exemption for eligible electric vehicles under the luxury car tax threshold (currently $91,387 for fuel-efficient vehicles) continues until 2029, with a 25% discount applying thereafter. If salary packaging or fleet remuneration is on the table, this remains one of the most efficient employee benefit levers available — worth modelling against a traditional novated lease.
- Payday Super is now bedded in from 1 July 2026 — superannuation guarantee must be paid on the same day as wages. If your payroll cadence and cash flow haven’t been re-engineered for this, do it now, not in June. Read our full Payday Super guide here.
- Division 296 (the additional tax on super balances above $3 million) remains on the table. The specific design — particularly the treatment of unrealised gains — is still in flux, but anyone with a self-managed super fund holding property, private company shares or other illiquid assets should be modelling the impact.
- ATO compliance funding has been topped up again, with explicit focus on Personal Services Income, trust distributions, and Division 7A. Data-matching capability is now mature — the era of “out of sight, out of mind” with the ATO is over.
None of these reforms are law yet — and that matters. It means there is time to think clearly, plan deliberately, and act strategically rather than reactively. The worst thing you can do right now is make hasty decisions on incomplete information. The best thing is to get clear on where you stand, understand which reforms actually affect your structure, and start building a plan that gives you options.
Practical Priorities for the Next Six Months
- Map your structures. Document every trust, company and SMSF in the group, what each one holds, who the beneficiaries are, and what original purpose it was set up to serve. You cannot plan what you cannot see.
- Get current valuations on long-held assets. If you may use the three-year rollover relief, or if you’re weighing pre-July-2027 disposals, you need defensible market values — not estimates.
- Model the after-tax outcomes both ways. Indexation versus the existing 50% discount. Quarantined versus unquarantined losses. A 30% trust tax versus current marginal-rate distributions. Decisions get easier when the numbers are on the page.
- Review your residential property pipeline. Anything signed before 12 May 2026 is grandfathered. Anything settling after that needs to stand on its own commercial merits without the old gearing assumptions.
- Refresh your estate and succession plan. Trust reforms, CGT changes and intergenerational transfers all intersect. The plan you wrote five years ago almost certainly needs an update.
Over the coming months, we’ll be working through these changes with each of our clients individually — looking at valuations, restructuring opportunities, timing strategies and succession planning where they’re relevant. If you’d like that conversation framed around your specific structure rather than the headlines, that’s exactly what we’re here for.
Disclaimer: This article reflects measures announced in the 2026–27 Federal Budget as at the date of publication. None of the measures discussed are yet law, and final legislation may differ. The content is general in nature and does not constitute personal tax, legal or financial advice. Individual circumstances vary materially. Please consult an ATO registered agent or qualified adviser before acting on any of this information.
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