Federal Budget 2026-27
Decoded for the people who actually have to live with it.
Filter by who you are. Filter by what you care about. Translating the changes from the federal budget into what matters for individuals, businesses, and trusts.
Synthesizing 1,200 pages into 20 changes that matter
Underlying deficit, 2026-27
$31.5B
1.0% of GDP, $2.8B better than MYEFO
CPI peak, June 2026
5.0%
Returns to 2.5% by June 2027
Housing investment, total
$47B
Largest commitment on record
Savings package
$63.8B
Largest single-budget savings ever
Deep dives
The big three, in full.
Step 1
Who are you?
Step 2
What do you care about?
Showing 20 changes across all audiences
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.
Read full breakdown →50% CGT discount replaced with CPI indexation plus a 30% minimum tax
For all CGT assets held 12+ months 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.
Read full breakdown →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.
Read full breakdown →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.
Read full breakdown →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.
Read full breakdown →$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.
Read full breakdown →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.
Read full breakdown →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.
Read full breakdown →$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.
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.
$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.
EPBC streamlining + 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.
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.
Read full breakdown →$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.
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.
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.
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.
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.
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.
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.