With a lot of media reporting what’s wrong or right with 2026 federal budget, it is important to get the facts straight and understand the impliactions of the changes.
This starts with basics including:
- The changes have to pass Parliament before they can be implemented
- Additional consulting and consideration for changes by government for the more controversial proposals including CGT on Start-Up companies
Below is a brief summary of the proposed starting dates for the various proposals
- Reasonable time for consideration, discussion, Planning for any changes (where necessary)
Further explanations, notes and observations with future newsletters
Retrospective
- Increase the Medicare levy low‑income thresholds for singles, families, and seniors and pensioners by 2.9 per cent from 1 July 2025
- Temporary reduction of fuel excise and heavy vehicle road user charge – three months from 1 April 2026
- Extension of Small Business Debt Helpline and mental health coaching program from 2025–26 to 30 June 2027
Global Anti‑Base Erosion Rules (Pillar Two) Side-by-Side Package Implementation – from 1 January 2026
2026–27 income year
- $1,000 Instant Tax Deduction for Australian tax residents who earn income from work without itemising and claiming work‑related expenses
- Permanent extension to $20,000 instant asset write-off for small business with turnover up to $10 million
- Loss carry-back – for companies with aggregated annual global turnover of less than $1 billion, from 1 July 2026
- Modernising Private Health – removal of age-based uplift of the Private Health Insurance Rebate from 1 April 2027
- Funding for Phase 2 of the Counter Fraud Strategy to modernise the prevention and detection of fraud in the tax and super systems – from 1 July 2026
- Additional DGRs listed – for gifts received after 30 June 2026 and before 1 July 2031 (note one organisation applies to gifts received after 30 June 2025)
- Superannuation System – funding over 4 years from 2026–27 to strengthen governance requirements, supervision and enforcement in relation to managed investment schemes
Second tranche of improvements to Australian business registers – over 2 years from 2026–27
From 1 July 2027
- Capital gains tax – 50% CGT discount replaced by cost base indexation for assets held for more than 12 months, with 30% minimum tax on
net capital gains, from 1 July 2027 - Negative gearing reform – negative gearing for residential property will be limited to new builds from 1 July 2027
- Working Australians Tax Offset of $250 – from the 2027–28 income year
- Monthly PAYG instalments – small and medium businesses can opt in to reporting and paying PAYG instalments monthly from 1 July 2027
- Roll-over relief to restructure from 1 July 2027 for 3 years – to support small businesses and others that wish to restructure out of discretionary
trusts into another entity type such as a company or a fixed trust
Expanded venture capital tax incentives – from 1 July 2027
From 1 July 2028
- 30% minimum tax on discretionary trusts – from 1 July 2028
- Electric car FBT discount – From 1 April 2029, a permanent 25% discount on FBT for all electric cars valued up to and including the fuel‑efficient luxury car tax threshold
- Loss refundability – for start‑up companies with aggregated annual turnover of less than $10 million that generate a tax loss in their first two years of operation, from 1 July 2028
- Reform to the Research and Development Tax Incentive (R&DTI) – from 1 July 2028
Extension of ban on foreign purchasers of established dwellings to 30 June 2029
To be advised – Not known or not applicable
Strengthening the Foreign Resident Capital Gains Tax Regime – transitional arrangements re certain renewable energy infrastructure assets from first day of the next quarter after Royal Assent, until 30 June 2030
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