The 2026–27 Federal Budget introduces some of the most significant proposed tax reforms in years. From a fundamental shift in how discretionary trusts are taxed, to changes affecting property investors, capital gains, small businesses, and everyday workers — this Budget touches almost every type of taxpayer.
DFK Everalls has prepared a five-part Spotlight Series, breaking down each of the major measures in detail. Below is an overview of what is proposed and where to find out more.
1. Discretionary Trust Changes
From 1 July 2028, the Government proposes a minimum 30% tax rate on taxable income held in discretionary trusts. This represents a significant move away from the traditional flow-through treatment and may require a review of existing family trust structures well in advance of implementation.
Proposed rollover relief for up to three years from 1 July 2027 may allow some taxpayers to transition to alternative structures such as companies or fixed trusts.
Read: Discretionary Trust Changes — What You Need to Know →
2. Small Business Tax Changes
Two important measures are proposed to support small business investment and cash flow: a permanent $20,000 instant asset write-off for businesses with turnover under $10 million, and permanent two-year loss carry back rules for eligible companies.
If enacted, these measures may provide greater certainty for business planning and capital investment decisions.
Read: Small Business Tax Changes — Investment and Cash Flow Opportunities →
3. Individual Tax Changes
A new $250 Working Australians Tax Offset is proposed from 1 July 2027, alongside increases to Medicare levy low-income thresholds of approximately 2.9%. While modest in isolation, these changes may benefit lower-income workers and support household budgeting.
Read: Individual Tax Changes — What Workers Need to Know →
4. Capital Gains Tax Reform
The proposed removal of the 50% CGT discount — replaced with CPI indexation and a minimum 30% tax rate — represents one of the most structural changes to investment taxation in decades. Transitional rules would preserve the existing discount for gains accrued before 1 July 2027, making accurate asset valuations and early planning particularly important.
Read: Capital Gains Tax Reform — A Structural Shift for Investors →
5. Negative Gearing Changes
From 1 July 2027, negative gearing is proposed to be limited to newly constructed residential properties. Properties acquired before 7:30pm AEST on 12 May 2026 are grandfathered. Investors holding or considering established properties under the new rules may face different cash flow and tax outcomes.
Read: Negative Gearing Changes — A New Landscape for Property Investors →
Stay informed, plan ahead
All of these proposals are subject to legislation and may change before being enacted. The key to navigating this environment is understanding which measures may apply to you — and acting before implementation dates, not after.
DFK Everalls is here to help you review your structures, plan your timing, and position your affairs effectively.
Articles in this series
→ Discretionary Trust Changes — What You Need to Know
→ Small Business Tax Changes — Investment and Cash Flow Opportunities
→ Individual Tax Changes — What Workers Need to Know
→ Capital Gains Tax Reform — A Structural Shift for Investors
→ Negative Gearing Changes — A New Landscape for Property Investors
| Disclaimer: This article provides general information only and is based on the proposed measures announced in the 2026–27 Federal Budget. These measures are subject to legislation and may change. This content does not constitute tax, financial or legal advice. You should not act on this information without obtaining professional advice tailored to your circumstances. |
