On Tuesday 12 May, Treasurer Jim Chalmers handed down the 2026–27 Federal Budget – and there’s quite a bit to unpack that will directly affect business owners, employers, and investors.
Here are the key changes you need to know about:
For Business Owners
- Instant asset write-off permanently set at $20,000 (from 1 July 2026). If your business has turnover under $10M, you can immediately deduct the full cost of any eligible asset under $20,000 – no more year-to-year uncertainty.
- Loss carry-back expanded (from 1 July 2026). Companies with global turnover under $1 billion can now carry back a tax loss and offset it against tax paid up to two years earlier – helpful if your business has had an uneven couple of years.
- Electric vehicle FBT exemption being wound back (from 1 April 2027). If you’re offering EVs as a staff benefit, the full FBT exemption will be limited to vehicles costing $75,000 or less from April 2027. It is worth reviewing any existing arrangements now.
- PAYG instalment changes (from 1 July 2027). Small and medium businesses will be able to opt into monthly PAYG reporting with ATO-calculated instalments built into your accounting software – potentially improving cash flow management.
For Investors and Those with Trust Structures
- Negative gearing restricted to new builds (from 1 July 2027). Properties acquired after 12 May 2026 will only be eligible for negative gearing losses to be offset against rental or capital gains income – not wages or other income.
- CGT discount replaced by indexation + 30% minimum tax (from 1 July 2027). The current 50% CGT discount will be replaced by CPI indexation, and a 30% minimum tax will apply to capital gains. Pre-CGT asset exemptions will also end. Transitional rules apply to existing investments.
- Minimum 30% tax on discretionary trust distributions (from 1 July 2028). If you operate through a family trust, distributions to lower-income beneficiaries will attract a minimum 30% tax. Rollover relief for restructuring into a company or fixed trust will be available for three years from 1 July 2027.
For Your Employees (and Your Payroll)
- $1,000 instant tax deduction for work-related expenses (from 1 July 2026). Employees can claim up to $1,000 in work-related expenses without needing to keep receipts – though this removes the FBT exemption on certain salary-packaged items.
- Income tax cuts already legislated – the 16% tax rate on income between $18,201 and $45,000 drops to 15% on 1 July 2026, then to 14% on 1 July 2027.
What's The Economic Backdrop?
Growth is slowing (forecast 1.75% in 2026–27), inflation is expected to ease to around 2.5% by mid-2027, and the budget deficit sits at $31.5 billion. Wage growth is forecast at 3.5% – but real wages are expected to fall this year before recovering.
How Can Walsh Accountants Help?
Many of these changes take effect from 1 July 2026 or later – but some (particularly around property acquired after 12 May 2026 and EV salary packaging) have immediate implications.
We’d recommend a conversation before 30 June to make sure your structure and investments are positioned well for what’s ahead.
As always, these are announcements – not yet law. We’ll keep you updated as legislation progresses.
Contact us today for a complimentary discussion based on your personal circumstances.
Federal Budget 2026-27
Download your comprehensive guide to the Federal Budget 2026-2027.
