The proposed 2026 Federal Budget contains significant tax changes that may affect property investors, business owners and families using discretionary trusts.
Key Proposed Changes
1. Negative Gearing
Future negative gearing concessions may be limited to new residential properties, potentially changing the way investors approach property ownership and investment strategies.
2. Capital Gains Tax (CGT)
The current 50% CGT discount may be replaced with an inflation-based indexation system from 1 July 2027, which could increase the tax payable on future property and business sales.
3. Discretionary Trusts
A proposed 30% minimum tax on discretionary trust income from 1 July 2028 may reduce the tax benefits of income splitting and bucket company strategies.
What Should You Do?
At this stage, detailed legislation has not yet been released, so it is important not to make any rushed decisions. However, now is a good time to:
• Review your business and investment structures.
• Consider how future property purchases or sales may be affected.
• Review your trust arrangements and succession planning.
• Undertake proactive tax planning before 30 June.
Every client’s situation is different. If you would like to discuss how these proposed changes may affect you, contact PTAS Accountants for personalised advice.