When the Federal Budget is released, it’s easy to get caught up in the headlines.
Tax cuts. Property changes. Superannuation updates. Aged care funding. Business incentives.
But as financial advisers, the question we ask is more practical: what does this actually mean for the people we advise?
The 2026–27 Federal Budget includes several proposed changes that may have a meaningful impact on investors, pre-retirees, retirees, business owners and families planning for the future. Some measures are still proposals and not yet law, so they may change before implementation.
That said, some clear planning themes are emerging. The biggest message is this:
Structure, timing and advice matter more than ever.
1. Capital gains tax changes may affect long-term investment planning
One of the most significant announcements is the proposed reform of Capital Gains Tax (CGT).
From 1 July 2027, the Government intends to replace the current 50% CGT discount for individuals, trusts and partnerships with cost base indexation, alongside a 30% minimum tax rate on capital gains. The changes are expected to apply to gains accruing after that date, for assets held longer than 12 months, such as property and shares. Superannuation funds are not expected to be affected.
In practical terms, instead of halving a capital gain for tax purposes, the asset’s cost base would be adjusted for inflation and a minimum tax rate would apply to real gains.
For some investors, the outcome may be similar. For others — particularly those planning to sell assets in a low-income year — the new rules could reduce the effectiveness of traditional CGT timing strategies.
The main residence exemption is expected to remain. Investors in eligible new-build residential property may also be able to choose between the existing discount and the new indexation approach.
What this means for you:
This isn’t necessarily a reason to rush into selling assets. But it is a timely opportunity to review investment structures, ownership arrangements and long-term strategy — especially if you hold significant unrealised gains.
2. Negative gearing changes could reshape property investment decisions
The Budget proposes limiting negative gearing benefits for residential property investments to new builds from 1 July 2027.
Established residential properties owned at Budget night are expected to be grandfathered until sold. Properties purchased between Budget night and 30 June 2027 may be negatively geared during that period, but not after 1 July 2027.
This doesn’t make property investment unviable — but it does place greater emphasis on the underlying quality of the investment.
Importantly, these changes are expected to apply only to established residential property. Other asset classes, including shares and commercial property, are not expected to be affected in the same way. Superannuation funds, including SMSFs, are also expected to be excluded.
What this means for you:
Future property decisions will increasingly need to stand on their own merits. Rental yield, cashflow, debt levels, tax position and long-term objectives all matter — not just tax deductions.
3. Trust structures may require closer review
From 1 July 2028, the Government proposes a 30% minimum tax rate on the taxable income of discretionary trusts, paid by the trustee.
Certain trusts are expected to be excluded, including fixed trusts, complying superannuation funds, deceased estates and charitable trusts. Some income types may also be excluded. Temporary rollover relief is proposed to allow restructuring where appropriate.
For families and business owners who use trusts for investment, asset protection or succession planning, this is an area to watch closely.
What this means for you:
Trusts remain valuable tools — but their role, structure and purpose should be reviewed carefully in light of the proposed changes.
4. Some tax relief for workers — with varying impact
Several measures aim to ease cost-of-living pressures for working Australians, including:
- A proposed permanent Working Australians Tax Offset of up to $250 from 1 July 2027
- Legislated marginal tax rate reductions from 2026
- A proposed $1,000 instant work-related expense deduction from 2026–27
What this means for you:
While helpful, these measures are best viewed as part of a broader cashflow strategy. Small, consistent benefits can have a meaningful impact when directed deliberately towards wealth-building goals.
5. Superannuation remains central to retirement planning
No major new super tax changes were announced. However, scheduled changes from 1 July 2026 remain important, including increased contribution caps and transfer balance cap indexation.
For higher-balance members, the proposed Division 296 tax remains on the agenda.
What this means for you:
Superannuation remains one of the most powerful retirement planning structures available — but contribution timing and balance management matter more than ever.
6. Key considerations for business owners
The Budget proposes to permanently extend the $20,000 instant asset write-off from 1 July 2026 for eligible businesses. Other measures relate to losses, start-ups and investment incentives.
What this means for you:
Tax should support good business decisions — not drive them. Focus first on productivity and long-term value, then consider how tax settings can assist with timing and cashflow.
7. Aged care and health costs remain part of the picture
Additional funding is proposed for aged care services. At the same time, changes to the Private Health Insurance Rebate may increase costs for some older Australians.
What this means for you:
Later-life care planning is an essential part of retirement strategy — not something to leave until the last minute.
The bigger picture: planning beats reacting
Budgets come and go. Rules change. Markets move.
But the principles of good financial advice remain constant: clarity, structure and proactive planning.
At Heard Financial, we help clients bring confidence and clarity to complex financial decisions, so they can design their future and live their way. If any of these proposed measures could affect your investments, property plans, business or retirement strategy, it may be worth reviewing your position before the changes take effect.
General information only. This article does not take into account your personal objectives, financial situation or needs. You should seek personalised advice before making financial decisions.