Federal Budget 2026: What the changes could mean for your financial plan

The Federal Budget 2026 landed on Tuesday night. Like most budgets, it rewards the people who look past the headlines.

Before reacting, it helps to step back. Some announcements take effect now, others sit on the horizon and several won't apply until 2027 or beyond. That window matters. It gives you time to plan, rather than pressure to act.

We've cut through the noise. Here is what actually matters for your financial plan.

Changes to capital gains tax

From 1 July 2027, the 50 per cent CGT discount will be replaced by cost base indexation for assets held longer than 12 months, alongside a 30 per cent minimum tax on net capital gains. The change applies to individuals, trusts and partnerships.

A few important details:

• The 50 per cent discount still applies to gains arising before 1 July 2027
• Transitional rules mean only gains from 1 July 2027 onwards are affected
• Investors in new residential property can choose between the existing discount or the new indexation method
• Age Pension and other income support recipients are exempt from the minimum tax

Establishing the value of your assets at 1 July 2027 will be a meaningful exercise. If you hold long-term investments outside super, this is a change worth understanding well before the deadline.

Negative gearing limited to new builds

From 1 July 2027, losses from established residential properties acquired after 7:30pm AEST on 12 May 2026 will only be deductible against residential property income or capital gains. Excess losses can be carried forward.

Properties acquired before that date, including contracts entered but not yet settled, are exempt until disposal. New builds, build-to-rent developments and properties held through widely held trusts and super funds remain exempt.

If you already hold an established investment property, your current arrangement continues. If you are considering a new property investment, timing and property type will now play a bigger role in the conversation.

A 30 per cent minimum tax on discretionary trusts

From 1 July 2028, trustees of discretionary trusts will pay a minimum 30 per cent tax on the trust's taxable income. Beneficiaries, other than corporate beneficiaries, will receive non-refundable credits for the tax paid, which can offset current year income tax liabilities.

This is a significant development for family groups and business owners who use discretionary trusts for income distribution and structuring. Key points:

• Fixed trusts, complying super funds, testamentary trusts and charitable trusts are not affected
• A three-year rollover relief from 1 July 2027 will help small businesses restructure into companies or fixed trusts without triggering CGT
• From 1 January 2027, the Australian Small Business and Family Enterprise Ombudsman will be available to assist small businesses navigating their options

For some clients, this will prompt a careful review of structure. For others, the existing trust may still make sense once the full tax position is considered. There is no need to rush but there is real value in understanding where you stand well before 2028.

What the Budget means for working Australians

The Budget included a few changes worth noting for individuals and households:

• A $1,000 instant tax deduction from the 2026–27 income year for work-related expenses, with no need to itemise if claiming below that threshold. Charitable donations and professional fees can still be claimed separately on top
• A new $250 Working Australians Tax Offset (WATO) from the 2027–28 income year, lifting the effective tax-free threshold for income from work to $19,985
• A 2.9 per cent uplift to the Medicare levy low-income thresholds from 1 July 2025, in line with cost-of-living movements
• A permanent $20,000 instant asset write-off for small businesses with turnover up to $10 million, from 1 July 2026

None of these are headline-grabbing but they do represent a modest improvement to take-home position and small business cash flow.

Aged care and health support

Two announcements stand out for retirees and those planning for later-life care:

• Significant funding in response to the Residential Aged Care Accommodation Pricing Review, with $606.5 million over four years from 2026–27 and a further $3.0 billion committed from 2030–31
• $1.4 billion over four years to improve access and affordability through the Support at Home program, plus $377.3 million in ongoing annual funding

The Private Health Insurance Rebate will also change. From 1 April 2027, the age-based uplift will be removed. This is something older Australians who currently receive a higher rebate will want to factor into their planning.

A measured way to read the Federal Budget 2026

This Budget is less about immediate action and more about informed planning. With the major changes taking effect from 2027 or 2028, there is time to:

• Review investment structures and timing in light of the CGT and trust changes
• Reconsider property investment strategy if it is part of your portfolio
• Update aged care and retirement income assumptions where relevant
• Reflect on the structures you have built and whether they still serve your goals

Tax policy is one part of a broader plan. The decisions that matter most remain the ones grounded in your goals, your stage of life and the people you are building your future with.

If you have any questions or concerns about how the Budget will impact your situation, speak to an Apt adviser. We are here to help you understand what has changed and what it means for the life you are planning.

Disclaimer: This article is general information only and reflects Budget announcements at the time of writing. Measures may change and are subject to the passage of legislation and further detail. It does not consider your personal circumstances or constitute financial, tax or legal advice.