The upcoming Federal Budget has been described as the biggest shake-up to Australia’s tax system in 25 years. That sounds dramatic, and for some it is. But most of the headlines have focused on changes that don’t land for another year or two, while a handful of things take effect from 1 July 2026.
Here’s a quick rundown of everything you need to know.
Changes Starting 1 July 2026
Workers are getting a small income tax cut. The 16% tax rate drops to 15% from 1 July 2026, with a further cut to 14% scheduled for 2027. It won’t transform anyone’s finances, but it does mean a little more take-home pay.
A new $1,000 instant deduction has been introduced from this financial year so you can claim work-related expenses without keeping your receipts. However, if your genuine deductions add up to more than $1,000, you can still claim those instead.
The instant asset write-off becomes permanent. Small businesses with turnover under $10 million can write off eligible assets costing less than $20,000 at tax time.
There’s big changes to super as well which business owners will need to be across. ‘Payday Super’ begins, meaning employers must pay super at the same time as wages rather than quarterly. Definitely worth reviewing your payroll setup before the first pay run of the new financial year.
Changes Coming in 2027 and Beyond
Negative gearing will only be available for new builds from 1 July 2027. While this is some time away, it is worth understanding how this will change the numbers if you are planning to buy an established investment property. Properties held before the announcement (12 May 2026) will be exempt from the changes.
The capital gains tax discount is being replaced. The flat 50% CGT discount on investments will be swapped out for a discount based on inflation with a minimum 30% tax applying to larger gains. Existing small business concessions are being kept. If selling an investment is something in your near future, the timing will matter more than usual.
A minimum 30% tax on family trusts will be introduced from 1 July 2028. There’s rollover relief available from 2027 for anyone who needs to restructure, so there’s time, but you don’t want to leave this to the last minute.
Keep an Eye on SMSF Property Lending
The government has announced that it will ban new self-managed super fund (SMSF) borrowing for residential property, something we expect to take effect mid-to-late August 2026. (They are still discussing details in parliament at the time of writing).
If you already have one of these loans, nothing changes for you. Existing arrangements are grandfathered. You can also still buy commercial property with this method.
If you were hoping to buy residential property with an SMSF, your window to act is closing fast and the key is the contract date, not settlement.
Quick Timeline
1 July 2026: income tax cut, $1,000 instant deduction, permanent asset write-off, super rate to 12%, payday super
Mid-2026: SMSF residential lending change (subject to legislation).
1 July 2027: negative gearing limited to new builds, CGT discount changes.
1 July 2028: minimum tax on family trusts.
What This Means For You
This might all feel overwhelming, but ask yourself three questions:
- Does this change how much I can borrow?
- Should I move sooner on a property plan?
- Is my current loan still the right one?
If you don’t have any answers, that’s where we can help. Our team of experts will happily walk you through any questions you might have including how these changes might affect your borrowing capacity. For anything tax related, we’re happy to refer you to qualified professional.
If you’d like to talk through your financial position, get in touch today.