This year’s Federal Budget includes a range of proposed tax reforms affecting individuals, small businesses, property investors and discretionary trusts.
While many of these measures are still subject to legislation and may change, the overall direction is clear. The Government is aiming to provide additional support for workers and small businesses, while also changing the way some investment income and structures are taxed.
For many Australians, the key question is simple: could any of these changes affect me, my superannuation, my investments, my business or my retirement plans?
Support for individuals
Several measures are aimed at easing cost-of-living pressure and simplifying tax obligations for workers.
From the 2027–28 financial year, the Government plans to introduce a $250 Working Australians Tax Offset for eligible workers. The Budget papers state this will benefit more than 13 million Australian workers and increase the effective tax-free threshold for workers to $19,985.
This is in addition to previously announced reductions to the lowest income tax rate, which is set to reduce to 15% from 1 July 2026 and 14% from 1 July 2027.
A $1,000 instant tax deduction for work-related expenses is also proposed from 1 July 2026. This would allow eligible workers to claim a standard deduction for work-related expenses, reducing the need for detailed record-keeping.
Support for small business
The Budget also includes measures aimed at supporting small business cash flow and investment.
The $20,000 instant asset write-off is set to become permanent from 1 July 2026, allowing eligible small businesses to immediately deduct the cost of certain business assets.
The Government is also reintroducing loss carry-back rules. In simple terms, this may allow eligible companies that make a loss in a current year to use that loss to obtain a refund of tax paid in earlier profitable years.
From 2028–29, additional support is also expected for early-stage businesses, with refunds linked to tax losses in their first two years.
These measures are designed to improve cash flow, support business investment and provide more flexibility during periods where conditions may be uncertain.
Changes to property investment
Some of the most significant proposed changes relate to property investment.
From 1 July 2027, negative gearing for residential property is proposed to be limited to new builds. Existing arrangements will remain unchanged for properties held before Budget night, and investors who buy new builds will still be able to deduct losses from other income.
For established residential properties purchased after the relevant date, losses will generally only be able to be offset against residential property income, rather than other income such as wages. Any unused losses may be carried forward to future years.
This is a major change for property investors and may influence future decisions around investment property, cash flow, tax planning and borrowing.
Capital Gains Tax changes
Capital Gains Tax rules are also proposed to change.
From 1 July 2027, the Government plans to replace the current 50% CGT discount with a discount based on inflation. A minimum tax rate of 30% on capital gains is also proposed from the same date.
The Budget material states that the CGT changes will only apply to gains arising after 1 July 2027. Investors in new builds will also be able to choose between the existing 50% CGT discount and the new arrangements.
These changes may be relevant for people who hold investments outside superannuation, including property, shares and other assets.
Changes to discretionary trusts
From 1 July 2028, the Government proposes to introduce a minimum tax rate of 30% on discretionary trusts, with some exceptions.
This change is not expected to apply to fixed trusts, super funds, deceased estates, special disability trusts and certain farming income.
Rollover relief is expected to be available for three years from 1 July 2027 to assist small businesses and others that may wish to restructure.
This may be particularly relevant for people who operate through family trusts, hold investments in trusts, or use trusts as part of their business or estate planning arrangements.
Superannuation planning opportunities
Importantly, the Budget did not announce major changes to the core tax treatment of superannuation.
For some people, that may make superannuation planning even more important, particularly if they are approaching retirement, over age 60, or looking at how best to structure their income and investments.
Superannuation can still offer favourable tax treatment compared with many investments held personally, depending on your circumstances. This may create planning opportunities around contributions, retirement income streams, investment structures and the timing of retirement.
The right strategy will depend on factors such as your age, income, super balance, contribution limits, cash flow needs and when you may need access to your money.
This is an area where personalised advice can make a real difference.
Looking ahead
These proposed reforms represent a meaningful shift in the tax landscape, but it is important to remember that some measures are not yet law and may be subject to change.
The impact will also vary from person to person. Some people may be largely unaffected, while others may need to review their investment structures, tax planning, superannuation strategy or retirement income approach.
With some taxes outside superannuation proposed to change, it may be worth understanding whether your current structure is still working as effectively as it could.
At CSF Private Wealth, our role is to help clients understand what may be relevant to them and identify opportunities that may otherwise be missed.
If you would like to understand how these proposed tax changes may affect your superannuation, investments, business structure or retirement plans, we’re here to help.
Important Information:
CSF Private Wealth Pty Ltd (ABN 36 634 263 148) is a Corporate Authorised Representative No.1299668 of InterPrac Financial Planning Pty Ltd (Australian Financial Services Licence Number 246638).
The information in this article is general in nature and does not take into account your objectives, financial situation or needs. Before acting on this information, consider whether it is appropriate to you, and seek personalised advice where required.
