Property & housing
From 7:30pm AEST, 12 May 2026
Negative gearing restricted on new established property purchases
Losses on residential investment properties purchased after 7:30pm AEST on 12 May 2026 can no longer offset salary or business income. Losses can only offset other residential property income or carry forward. Full effect from 1 July 2027. New builds are exempt. Properties held before the announcement are fully grandfathered.
For you, as a property investor
If you already own established residential investment property, nothing changes for you. If you are about to buy, the property purchased after Budget night cannot offset losses against your wages from 1 July 2027. New builds remain fully negatively gearable indefinitely.
For you, as a business buyer
Indirect impact. If you are acquiring a business that owns residential property in the operating entity, the changes apply to those holdings. Worth flagging during due diligence.
For you, as a trust holder
Trusts holding residential investment property are caught the same way as individuals. Widely held trusts and complying super funds are exempt.
Impact:
Tax reform
From 1 July 2027
50% CGT discount replaced with CPI indexation plus a 30% minimum tax
For all CGT assets held 12 months or longer by individuals, partnerships and trusts, the 50% discount is replaced with cost base indexation by CPI and a 30% floor on the tax rate applied to real gains. Pre-1985 assets remain exempt. Owner-occupier main residence exemption preserved. Small business CGT concessions retained.
For you, as a property investor
Applies to all CGT assets, not just property. High-returning assets (above roughly 5% annualised) generally pay more tax under indexation than under the 50% discount. Low-returning assets pay less or nothing.
For you, as a business owner
Affects any non-business assets you hold personally. Small business CGT concessions on the sale of an active business asset are unchanged.
For you, as a business buyer
Sellers may bring forward sales to crystallise gains before 1 July 2027 under the existing 50% discount. Could create acquisition opportunities and influence vendor expectations.
For you, as a trust holder
Trusts and partnerships sit inside the new regime. Discretionary trusts holding investment assets face a compounded tax change with the minimum trust tax.
Impact:
Trusts & structures
From 1 July 2028
30% minimum tax on income distributed through discretionary trusts
Trustees of discretionary trusts pay a 30% minimum tax on trust taxable income. Beneficiaries receive non-refundable tax credits. Corporate beneficiaries are excluded from the credit mechanism. Around 350,000 small businesses operate through a discretionary trust. Roughly half are not expected to be affected in any given year.
For you, as a business owner
If you operate through a discretionary trust and distribute to family members on low marginal rates, the floor materially changes your after-tax position. The 3-year rollover relief window (1 July 2027 to 30 June 2030) lets you restructure into a company with no CGT or income tax consequences.
For you, as a business buyer
Most ETA-acquired businesses sit inside trusts. Factor the structure conversation into deal pricing and due diligence. The rollover window aligns nicely with typical post-acquisition integration timelines.
For you, as a trust holder
Primary production income is excluded. Fixed trusts, widely held trusts, special disability trusts, deceased estates, and charitable trusts are unaffected.
Impact:
Trusts & structures
From 1 July 2027 to 30 June 2030
Three-year rollover relief window for restructuring out of discretionary trusts
Full CGT and income tax rollover relief for restructuring out of a discretionary trust into a company or fixed trust. Small businesses moving to a company access the 25% small business tax rate, dividend imputation, and easier retained earnings handling. ASBFEO assistance available from 1 January 2027.
For you, as a business owner
This is the action item. The 12 months between 1 July 2027 (rollover opens) and 1 July 2028 (minimum tax starts) is your no-tax-consequence window to restructure.
For you, as a business buyer
Acquirers buying trust-held businesses between July 2027 and June 2030 can use the rollover relief post-settlement. Useful negotiating tool.
For you, as a trust holder
Talk to your accountant before 1 January 2027. ASBFEO support is free.
Impact:
Small business
From 1 July 2026
$20,000 instant asset write-off made permanent
Permanent $20,000 instant asset write-off for businesses with turnover under $10 million. Saves approximately $32 million per year in compliance costs across all SMEs. Worked example from Treasury: a cafe buying $19,000 of equipment can convert taxable profit into a loss and carry it back to a prior year for a refund.
For you, as a business owner
Genuine cash flow positive. Equipment purchases under $20,000 are immediately deductible from 1 July 2026 onward. No more uncertainty about whether the IAWO will be extended next year.
For you, as a business buyer
Useful post-settlement. Asset purchases made in the first year of ownership of an acquired business are immediately deductible.
Impact:
Small business
From 1 July 2026
Permanent two-year loss carry-back for companies up to $1 billion turnover
Eligible companies can use current-year tax losses to claim a refund for tax paid in the prior two income years. Around 85,000 companies expected to benefit. Effectively turns prior-year tax payments into accessible cash during a loss period.
For you, as a business owner
Material cash flow protection. A business that hits a loss year can recover tax paid in the prior two profitable years. Particularly valuable for cyclical businesses.
For you, as a business buyer
Critical post-acquisition. Integration years often run at a loss. Loss carry-back gives you a refund from the seller-era tax payments. Worth modelling into your deal economics.
Impact:
Small business
From 1 July 2028
Loss refundability for startups in their first two years
Startups in their first two years of operation can receive a tax refund for losses, capped at the value of FBT and PAYG withholding paid on employee wages. Around 25,000 young companies eligible per year.
For you, as a business owner
If you are starting a business with employees, you can recover cash on losses funded by wages paid. Different from loss carry-back and stacks alongside it.
For you, as a business buyer
Less relevant if you are acquiring an established business with operating history.
Impact:
Small business
From 1 July 2027
Venture capital tax incentives expanded
VCLP investee asset cap raised from $250 million to $480 million. ESVCLP fund size cap raised from $200 million to $270 million. ESVCLP maximum investee asset cap raised from $50 million to $80 million.
For you, as a business owner
Larger pool of patient capital available if you are seeking growth equity. Relevant if your business is growth-stage and could benefit from VC investment.
For you, as a business buyer
More feasible to raise equity sidecar capital for larger transactions. Particularly relevant for tech-enabled or scaling targets.
Impact:
Small business
From 1 July 2028
R&D Tax Incentive reformed for young firms
Refundable offset threshold raised to $50 million turnover (capped at firms under 10 years old). Maximum expenditure cap raised to $200 million. Core R&D offset increased 25-50%. Expected to unlock $400 million per year in additional R&D by young firms.
For you, as a business owner
Materially better for any business under 10 years old doing genuine R&D. The threshold lift means more growth-stage companies access the refundable rate.
For you, as a business buyer
Any R&D-active acquisition target should be stress-tested under the new incentive structure. Could uplift post-acquisition cash returns.
Impact:
Workers & households
From 1 July 2027
$250 Working Australians Tax Offset for 13.3 million workers
Permanent annual tax offset. 97% of eligible workers receive the full $250. Effective tax-free threshold rises to $19,985 (or $24,985 with the Low Income Tax Offset). Includes around 1.5 million sole traders.
For you, as an owner-occupier
Direct $250 boost from the 2027-28 tax year. Stacks with the $1,000 instant tax deduction (from 2026-27) and the legislated rate cuts.
For you, as a business owner
Applies to you as a sole trader. For employed staff, the after-tax benefit may offset wage pressure conversations.
Impact:
Workers & households
From 1 July 2026
$1,000 instant tax deduction for workers
Workers can claim a $1,000 deduction without receipts from the 2026-27 income year. Around 6.2 million workers benefit. Average tax saving $205. Workers with more than $1,000 in work-related expenses can still claim the full amount in the normal way.
For you, as an owner-occupier
Cleanest tax cut in the package. No receipts, no paperwork.
For you, as a business owner
Applies to you as a wage-earning director or sole trader.
Impact:
Workers & households
From 1 July 2026 + 1 July 2027
Income tax rate on $18,201 to $45,000 drops to 14%
Legislated tax cuts continue. The rate on the $18,201 to $45,000 band drops from 16% to 15% on 1 July 2026, then from 15% to 14% on 1 July 2027. Combined with WATO and the instant deduction, an average earner is up to $2,816 better off per year by 2027-28 versus 2023-24.
For you, as an owner-occupier
Steady drip of legislated cuts. Calibrate your household budget for the gradual uplift.
For you, as a business owner
Wage cost conversations with staff need to account for higher after-tax pay even at the same gross rate.
Impact:
Property & housing
From 2026-27 onward
100,000 Homes for First Home Buyers
$326.1 million in 2026-27, $829.1 million total over four years. Funds direct construction of new homes reserved for first home buyers by 30 June 2034. Active jurisdictions for 2026-27 are QLD, SA, WA, TAS. NSW and VIC allocations not yet determined.
For you, as an owner-occupier
If you are a first home buyer, more new-build supply is coming through state-led construction programs. Confirm eligibility with your state housing authority.
For you, as a property investor
Increases new-build supply, which is the property type that retains negative gearing post-1 July 2027. Investor demand will likely concentrate in the same developments.
Impact:
Property & housing
From 2026-27 onward
$2 billion Local Infrastructure Fund
Conditional on state planning reform commitments. Ramping from $250 million in 2026-27 to $650 million by 2029-30. Targets up to 65,000 homes over the decade via roads, water, sewerage, and community amenity for greenfield and infill sites.
For you, as a property investor
Construction pipeline expansion increases new-build availability over the decade. Supply response is part of the policy intent behind the NG and CGT changes.
For you, as a business buyer
Civil contracting, construction services, and developer-aligned businesses will see uplifted demand. Worth screening as an acquisition theme.
Impact:
Property & housing
From Extended to mid-2029
Foreign investor ban on established dwellings extended
The existing two-year ban on foreign persons purchasing established residential dwellings is extended to mid-2029. Removes a marginal source of competition for local buyers in the established market.
For you, as a property investor
Marginal effect on demand for established stock. Foreign capital continues to be directed toward new builds.
For you, as an owner-occupier
Slightly less competition from offshore buyers in the established market.
Impact:
Energy & fuel
From 1 April 2026, three months
Fuel excise cut to 20.6 cents/litre for three months
Excise reduced from 52.6 to 20.6 cents per litre for three months from 1 April 2026. Heavy vehicle road user charge reduced to zero in the same window. Total package value $2.9 billion. ACCC penalty caps doubled to $100 million to deter retailer pocketing of the saving.
For you, as a business owner
Genuine relief for any business with a fleet or heavy vehicle exposure. Time the cash flow benefit into Q2 2026.
For you, as an owner-occupier
Pump price relief is the most visible household measure. Approximately 32 cents per litre saving on petrol and diesel.
Impact:
Energy & fuel
From 1 July 2027
20% domestic gas reservation on LNG exports
LNG exporters required to supply 20% of exports to the domestic market from 1 July 2027. Replaces existing voluntary mechanisms (Australian Domestic Gas Security Mechanism and Heads of Agreements). Most significant change to east coast gas market policy since LNG exports began.
For you, as a business owner
Energy-intensive manufacturers and east coast industrial businesses benefit from improved gas supply security and potentially lower wholesale prices over time.
Impact:
Productivity & regulation
From 1 July 2026
EPBC streamlining and new National Environmental Protection Agency
Single largest regulatory burden reduction at $3.045 billion per year. AI-assisted environmental assessments. Bilateral agreements with states. Has already accelerated approvals for more than 20,000 homes.
For you, as a property investor
Faster development approvals support the new-build supply pipeline.
For you, as a business owner
If your business touches development, environmental approval, or construction, expect faster decisions.
For you, as a business buyer
Development-adjacent acquisitions become more attractive as the approval risk discount narrows.
Impact:
Productivity & regulation
From 2026-27 onward
Financial sector regulatory burden cut $780 million per year
14 legislative reforms. Bank covered bond cap raised from 8% to 12%. APRA delegated approval threshold raised from $5 billion to $10 billion. Start-up bank approval window extended from 2 to 5 years. Australian Credit Licence annual compliance certificate simplified.
For you, as a business owner
Smaller and mid-tier lenders become more competitive. More credit choice over time.
For you, as a business buyer
Friction reduction for financing through smaller banks, non-bank lenders, and challenger institutions. More flexibility for acquisition finance.
Impact:
Productivity & regulation
From 2026-27 onward
ACCC penalty caps doubled to $100 million
Maximum penalties for anti-competitive and anti-consumer conduct doubled from $50 million to $100 million. ACCC enforcement capacity uplifted by $67.7 million over four years.
For you, as a business owner
Higher conduct risk for businesses with market power. Compliance frameworks worth reviewing.
For you, as a business buyer
Concentrated-industry incumbents face elevated regulatory risk. Mid-market independent operators become relatively more attractive as acquisition targets.
Impact:
General information only. Does not constitute financial, tax, or legal advice. Effective dates and mechanisms reflect Treasury announcements on 12 May 2026 and remain subject to enabling legislation. Consult a qualified professional for advice specific to your circumstances.
