2026–27 Federal Budget Highlights

The Federal Treasurer, Dr Jim Chalmers, handed down the 2026–27 Federal Budget at 7:30pm (AEST) on 12 May 2026.

Details of the highly anticipated initiatives which are slated to improve housing affordability have emerged. Major changes proposed are:

• Negative gearing for residential property will be limited to new builds from 1 July 2027, with no change for existing arrangements.
• The 50% CGT discount will be replaced with cost base indexation for all CGT assets (except new homes) from 1 July 2027, with a 30% minimum tax on realised gains also applying from that date.
• A minimum tax rate of 30% will be payable by trustees of discretionary trusts from 1 July
• Each working Australian taxpayer will receive a $250 Working Australians Tax Offset from the 2027–28 income tax year.
• Australia will transition to a permanent 25% discount on FBT for certain electric
• The instant asset write-off of $20,000 for small businesses applying the simplified depreciation rules has been extended permanently.
• Companies with up to $1 billion in turnover will be eligible to carry back tax losses for up to 2 years from 1 July 2026.

The Budget measures are additional to recent developments, including:

• the temporary reduction of excise and excise-equivalent customs duty rates for most fuel products from 1 April 2026 to 30 June 2026
• the release of exposure draft legislation for the instant $1,000 tax deduction for work-related expenses
• the release of exposure draft legislation for strengthening the foreign CGT regime in Div 855 of ITAA 1997, including the transitional CGT discount for certain renewable energy assets, and
• the release of a consultation paper on options to strengthen the annual superannuation performance

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au. The tax, superannuation and related highlights are set out below.