Federal Budget 2026–27: What it means for Central Queenslanders
This year’s Federal Budget is less about short-term relief and more about long-term structural change. The headline proposed changes to capital gains tax, negative gearing and discretionary trusts represent one of the most substantial shifts in Australia’s tax settings in decades. While these measures are not yet law, they signal a clear direction by the current Government.
The proposed changes have the potential to reshape future investment decisions and may prompt a reassessment or restructuring of existing investments, business structures and wealth-holding entities.
For property investors, the proposed changes to negative gearing are particularly important. From 1 July 2027, negative gearing would be limited to new residential properties, with losses on established properties no longer able to be offset against other income. Instead, those losses would be carried forward and used against future property income or gains. Existing investments are expected to be grandfathered, which provides some comfort for current owners.
The capital gains tax changes are equally significant. The current 50% discount for assets held longer than 12 months is proposed to be replaced by a system combining inflation indexation of the cost base with a minimum 30% tax rate on capital gains. Transitional rules are expected to apply, but over time this will change how investment returns are measured and could reduce the tax benefits of long‑held assets.
Discretionary trusts are also in focus. A proposed 30%minimum tax on trust income from 1 July 2028 would alter the long-standing strategy of distributing income to lower-tax beneficiaries. It is also important to recognise that these trusts are not used only by wealthy individuals, but also include testamentary trusts and trusts established to protect and provide for people with disability.
For businesses, there is at least some certainty. The$20,000 instant asset write-off is set to become permanent, supporting continued investment in equipment and vehicles, while loss carry-back rules provide a useful cashflow safety net.
Importantly, while these proposed changes may feel unsettling, they still need to pass Parliament. Once legislation is released, it should be carefully reviewed in light of your personal circumstances.
This is a timely reminder to review your financial and taxation position regularly and seek professional advice where needed. If you would like to discuss what these proposed changes may mean for you, please contact the professional team at UHY Haines Norton CQ on 07 4972 1300.
