Last night's Federal Budget contained some of the most sweeping tax reforms Australia has seen in decades. Treasurer Jim Chalmers framed it as rebalancing the tax system so wage earners are not treated very differently from those who earn income through assets and investments. Below are the changes most likely to affect you. Importantly, these measures are proposed — not yet law — so the final detail may change.

Capital Gains Tax — from 1 July 2027

The 50% CGT discount will be abolished and replaced with CPI cost-base indexation, so only the real gain above inflation is taxed, with a 30% minimum tax floor applying to that real gain. Gains are split at 1 July 2027: gains accrued before that date keep the current rules, and gains after it use the new rules. Super funds are unaffected, and the main residence exemption and small business CGT concessions are preserved. Investors in new builds can elect whichever method produces the better outcome on sale.

Negative gearing — trigger 7:30pm AEST, 12 May 2026

The rules follow three buckets. Established property already owned at budget night is unaffected — full negative gearing against salary continues. Established property bought after budget night is affected: from 1 July 2027 net rental losses can offset only residential property income, not salary, with unused losses carried forward. New builds are unaffected and keep full negative gearing. The contract date — not the settlement date — is what protects you.

Discretionary trusts — 30% minimum tax from 1 July 2028

A 30% minimum tax will apply to all trust taxable income, with no grandfathering for existing trusts. Individual beneficiaries on marginal rates above 30% are largely no worse off, but bucket (corporate) beneficiaries receive no credit and face a combined rate of roughly 55 to 60%. Fixed trusts, SMSFs, charitable and special disability trusts and several others are exempt. A three-year CGT-free rollover window opens on 1 July 2027 for those considering restructuring.

Superannuation

The Division 296 tax — an extra 15% on earnings above a $3 million balance, and 25% above $10 million — is now operative from 1 July 2026. Payday super also begins on 1 July 2026. The Low Income Super Tax Offset threshold rises to $45,000 from 1 July 2027, and super is now paid on paid parental leave.

Other changes of note

A permanent $250 Working Australians Tax Offset; a $1,000 instant work-expense deduction; legislated personal income tax cuts (the 16% rate falling to 15% then 14%); the age-based private health insurance rebate uplift removed from April 2027; and the ban on foreign purchases of established homes extended to 2029.

What this means for you

These are significant, interacting changes, and several carry time-sensitive transition windows — particularly the 1 July 2027 CGT date and the budget-night negative gearing cut-off. Because they remain proposed, the final legislation may differ. If you are weighing up selling investment assets, buying property (established versus new build), your trust structure, or your super strategy as your balance approaches $3 million, please talk to us before acting.

This article is general information only and does not take into account your objectives, financial situation or needs. Consider its appropriateness to your circumstances and seek personal advice before acting. General advice provided by Navarino Wealth, Authorised Representative No. 377 450 of PFP Financial Services Pty Ltd, AFSL 535484.