The 2026 Federal Budget introduces significant changes to how capital gains, property and wealth structures are taxed, alongside targeted cost‑of‑living support.
Key developments from the Budget include:
- Minimum tax on discretionary trust distributions: A 30% minimum tax will apply to distributions from 1 July 2028, reducing the benefit of income splitting to lower‑tax beneficiaries. Distributions to corporate beneficiaries will not receive a credit for tax paid at the trust level, creating a clear risk of economic double taxation and reducing the effectiveness of common “bucket company” structures.
- Changes to negative gearing for established properties: For properties purchased after budget night, from 1 July 2027 rental losses can no longer be offset against wages or other income and are instead only usable against future rental income or capital gains. Existing holdings can continue under the current rules.
- Capital gains tax reform and minimum tax on gains: From 1 July 2027, the 50% CGT discount is replaced with a system that indexes the cost base of assets to inflation, meaning only inflation‑adjusted gains are taxed, alongside a 30% minimum tax rate. Pre‑1985 assets will also be brought into the system, with only gains accruing from 1 July 2027 taxed under the new framework.
Our full Budget Update provides a comprehensive overview of these changes and their implications. Download the PDF to read more.
For the grants perspective on the Federal Budget, read Avant Group’s comprehensive analysis here.
