Are you wondering how the latest changes to capital gains tax will affect your property portfolio or share holdings? The 2026-27 Australian Federal Budget, handed down on 12 May 2026 by Treasurer Jim Chalmers, has introduced some of the most significant shifts in investment taxation seen in decades. For many Australians, these changes represent a fundamental move away from the traditional 50 percent discount towards a system based on inflation and minimum tax rates.
As a finance comparison tool, Simple Loans is here to help you navigate how these changes might impact your borrowing capacity and investment strategy. Whether you are looking at investment loans for a new build or refinancing your current portfolio, understanding the timeline of these reforms is essential for long term planning.
The End of the 50 Percent CGT Discount
For many years, Australian investors have relied on a 50 percent discount on capital gains tax for assets held for more than twelve months. From 1 July 2027, this discount will be replaced. Under the new rules, the 50 percent discount is being phased out in favour of inflation indexation.
This means you will only pay tax on the real growth of your asset above the rate of inflation. However, the budget also introduces a 30 percent minimum tax on these gains. This shift could significantly change the after tax return on investment for high growth assets. If you are currently browsing our blog for investment tips, it is worth noting that these changes apply to both property and shares.
New Builds vs Existing Property
The government has carved out a specific path for the construction industry. If you are investing in new residential builds, you may still have a choice. Investors in new builds will keep the option to choose between the old 50 percent discount or the new indexation method after 1 July 2027.
This measure is designed to stimulate housing supply across Australia. When combined with the changes to negative gearing, which will be limited to new builds only from 1 July 2027, the incentive to buy off the plan or build new is higher than ever. If you are considering entering the market, exploring your options for /quick-quote services can help you understand your potential repayments early.
Negative Gearing and Grandfathering Rules
One of the most talked about measures in the 2026 budget is the restriction on negative gearing. From 1 July 2027, negative gearing will only be available for new builds. This is a massive shift for the Australian property market.
The good news for current investors is the grandfathering clause. If you already hold an investment property that is negatively geared before the 1 July 2027 deadline, you can continue to claim those deductions under the existing rules. This creates a window of opportunity for those looking to secure existing dwellings before the cut off date. You might want to look into personal loans or property finance options to settle your plans before these changes take effect.
Impact on Discretionary Trusts
Many Australians use discretionary trusts to manage their investment portfolios and distribute income. The budget introduces a 30 percent minimum tax on discretionary trust income starting from 1 July 2028. This is intended to ensure a base level of tax is paid on distributions.
Recognising that this is a major change for family structures, the government is providing three year rollover relief to help people transition. This period may allow you to restructure your holdings or reconsider how you distribute capital gains. During this transition, keeping an eye on competitive rates, starting from 5.99% p.a. (with a range up to 29.99% p.a.), could be vital for maintaining your cash flow.
Business Incentives and Manufacturing Support
While the CGT changes target the investment side, the budget also aims to support business owners and sole traders who might be feeling the pinch. The 20,000 dollar Instant Asset Write-Off has been made permanent from 1 July 2026 for businesses with a turnover up to 10 million dollars.
Additionally, a two year loss carry back provision will be available for companies with a turnover up to 1 billion dollars starting 1 July 2026. For those in the transport or manufacturing sectors, the 1 billion dollars in interest free loans for businesses hit by the fuel crisis could provide a necessary lifeline. If you are looking to upgrade your fleet or machinery, checking out /truck-finance could be your next logical step.
Navigating the Fuel and Energy Landscape
The budget addresses rising costs for working Australians through a 32 cents per litre fuel excise cut for three months starting 1 April 2026. On top of this, the government is investing 14.8 billion dollars into the Strengthening Australia's Fuel Resilience package.
For those considering the switch to electric vehicles, the EV FBT full exemption remains for vehicles under 75,000 dollars until 1 April 2029. For more expensive EVs, a permanent 25 percent FBT discount will apply from 1 April 2027. If you are planning a vehicle purchase, comparing options via our tools could save you time and money.
Frequently Asked Questions
When do the CGT changes start?
The replacement of the 50 percent CGT discount with inflation indexation and a 30 percent minimum tax is scheduled to begin on 1 July 2027. Existing investments may be impacted depending on when they are sold.
Can I still negatively gear an old house?
Only if you own it before 1 July 2027. The budget measures state that negative gearing will be restricted to new builds only after this date, though existing investors will be grandfathered under the old rules.
How does the Instant Asset Write-Off work?
From 1 July 2026, small businesses with a turnover under 10 million dollars can immediately deduct the full cost of eligible assets worth up to 20,000 dollars. This is now a permanent feature of the tax system.
Is there relief for individual taxpayers?
Yes, a new 1,000 dollar instant tax deduction for individuals and sole traders (no receipts required) starts in the 2026-27 financial year. Furthermore, a 250 dollar Working Australians Tax Offset will be introduced from 2027-28.
As the landscape for property and share investing shifts, staying informed is your best tool for success. While the 2026-27 budget introduces stricter rules for some, it offers significant incentives for new housing and business growth. If you are ready to see how these changes might factor into your next loan application, head over to our /quick-quote page to view the latest options available through our finance comparison tool.
Simple Loans is a finance comparison tool. AFCA member 96925. Australian Credit Licence 509582. Information is general only and does not constitute financial advice.
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