Resilience and Reform — Here’s What You Need to Know!

The 2026–27 Federal Budget is here: tax changes, fuel relief, property reform, and a few hard truths. We’ve cut through the noise so you can focus on what actually changes for your financial life.

No spin, no cheer; just what it means and what to do next.

Who’s cashing in, who’s taking a hit, and who’s in a mixed bag this year?

IMPORTANT: Unless otherwise stated, measures announced in the 2026–27 Federal Budget remain proposals only and are subject to legislation and final implementation details. Current tax laws remain unchanged unless and until the measures are enacted by Parliament. As part of the consultation and legislative process, the final form, timing and scope of these measures may change before becoming law.

💰 🟢 Cashing In

Workers & Employees

Tax relief arrives in layers — and the timing of each layer matters more than the headline.

From 1 Jul 2026: Tax rate on $18,201–$45,000 drops from 16% to 15% — saving up to $268/year.
From 1 Jul 2027: Rate drops again to 14% — saving up to $536/year cumulatively.
From the 2026–27 tax return: New $1,000 instant work deduction, no receipts required up to this threshold. Around 6.2M workers benefit, with average tax savings of $205.
From 2027–28: Permanent $250 Working Australians Tax Offset (WATO) for 13M+ wage and salary earners. Received when lodging your 2027–28 tax return.

Key Takeaways The relief is real but modest — and most of it lands well after the cost-of-living squeeze peaks. Don’t spend it before it arrives. Where it makes the biggest difference is when it’s redirected — into super, debt reduction, or an emergency buffer. Small, consistent amounts compound into something meaningful over time.

🏠 🟢 Cashing In

Aspiring Homeowners

The most significant rewrite of established-property tax rules in decades. Whether the practical benefit shows up in your purchase depends on how the market responds.

Negative gearing restricted to new builds from 1 Jul 2027 (for properties purchased after Budget night) — potentially reducing investor competition on established homes.
CGT discount overhauled from 1 Jul 2027 — replaced with an inflation-based discount plus a minimum 30% tax on capital gains for new assets. Investors in eligible new builds can continue to use the existing 50% CGT discount.
$2B Local Infrastructure Fund for roads, water and sewerage to unlock up to 65,000 new homes over the decade.
Help to Buy expanded — shared equity scheme opens to an additional 75,000 Australians.
Foreign buyer ban on established homes extended to mid-2029.

For renters: Treasury estimates rents rise ~$2/week from the investor changes. Industry groups say that’s optimistic. Treasury also expects investor tax changes to reduce housing supply by 35,000 homes, partly offset by 65,000 new homes from infrastructure spend.

Key Takeaways The next 2–3 years are a genuinely different policy environment for first home buyers. If ownership is your goal, build your deposit plan around it now — including First Home Super Saver, Help to Buy, and how a new-build vs established trade-off changes the math. The window matters more than the headlines.

🏢 🟡 Mixed bag

Property Investors

The rules changed — but only for future purchases of established property. What you already own is protected.

Existing properties (owned before Budget night): Existing negative gearing rules remain grandfathered. Current CGT discount rules apply to gains accrued up to 30 Jun 2027, before transitioning into the new CGT indexation method.
Established properties bought after Budget night: Rental losses can only offset other rental income — not wages or other income. Unused losses carry forward.
New builds: Full negative gearing remains, and investors can choose between the existing 50% CGT discount and the new inflation-based model — whichever produces the better outcome at sale.
Discretionary trusts: Minimum 30% tax on distributions from 1 Jul 2028. A 3-year rollover window opens 1 Jul 2027 to restructure without an immediate CGT or stamp duty hit.

Key Takeaways Don’t let headlines drive a hasty decision. If you’re planning your next purchase, new builds now offer the clearer tax path. If you use a family trust, get advice before 1 July 2027 — the rollover window is generous but planning takes time.

💼 🟡 Mixed Bag

Small Business Owners

$20,000 instant asset write-off made permanent from 1 Jul 2026 (turnover under $10M). Plan equipment purchases without annual uncertainty.
Loss carry back: Eligible companies making losses in 2026–27 may be able to offset them against tax paid in prior years.
Start-up loss refundability from 2028–29 — eligible early-stage companies may receive refundable tax offsets linked to employee-related taxes paid.
Monthly PAYG instalments available from 1 Jul 2027 — better cash flow management when conditions shift.
$10.2B regulatory burden reduction — 1,000 nuisance tariffs abolished, free access to Australian standards, expanded Digital ID.
R&D Tax Incentive reform from 1 Jul 2028 — higher offsets for experimental R&D, refundable threshold up to $50M turnover.

Key Takeaways The permanent instant asset write-off is the one to act on now — it lets you plan capex without re-running the math every year. For businesses operating through a trust, the minimum 30% tax on certain discretionary trust distributions needs to be on your planning radar today, not in 2027.

👨‍👩‍👧 🟡 Mixed bag

Families

Paid Parental Leave reaches a full 6 months from Jul 2026.
3 Day Guarantee — eligible families get 3 days of subsidised childcare per week.
$3.7B aged care package — co-contributions removed for personal care services through Support at Home, and up to 5,000 new beds per year from Jul 2027.

The trade-off: Some older Australians may receive reduced private health insurance rebates under proposed means-testing changes.

Key Takeaways Run the numbers for your situation — childcare and parental leave changes can be worth a meaningful amount, but only if you actually claim what you’re entitled to. If you have ageing parents on private health insurance, review their cover before the rebate change lands.

🩺 🟢 Cashing In

Healthcare Users

$25B for public hospitals under a new 5-year funding deal with the states (5-year total: $220.3B).
Medicare Urgent Care Clinics made permanent — $1.8B locks in 137 clinics nationally. 4 in 5 Australians within a 20-min drive by Jul 2026.
Bulk billing target of 9 in 10 GP visits by 2030. 1,420 practices have switched to full bulk billing since November 2025.
$5.9B for PBS medicines — listing new treatments for cystic fibrosis, kidney disease, various cancers, and COVID-19 antivirals. RSV vaccine added to the NIP free of charge.

Key Takeaways Lower out-of-pocket health costs free up real money over time. If you’re carrying private health cover that no longer suits your situation, the expanded bulk billing and Urgent Care network may change the cost-benefit calculation — worth a fresh review at renewal time.

🛻 🟢 Cashing In

Drivers & Commuters

Fuel excise more than halved — from 52.6c to 20.6c per litre for 3 months from 1 Apr 2026. That’s ~$14 saved per 40L tank fill, ~$170 over 3 months.
EV salary sacrifice: Full FBT exemption continues for EVs under $75,000 (arrangements before 1 Apr 2029). EVs over $75,000 move to a permanent 25% FBT discount from 1 Apr 2027.
$40M for EV charging infrastructure — kerbside and regional.

Key Takeaways The excise cut helps short-term, but it’s temporary — and fuel prices remain exposed to ongoing global oil disruption. Reducing dependence on imported fuel is the long-term play. EVs under $75K remain a strong salary-sacrifice option for the next few years.

🌱 🟢 Cashing In

Sustainability-Focused

Home batteries: 370,000+ delivered since 1 Jul 2025. For the first time, household solar and batteries can directly participate in the electricity market — your home setup can actively earn, not just save.
$1.1B Cleaner Fuels Program for domestic low carbon liquid fuels.
$1B Hydrogen Headstart Round 2 providing revenue support for large-scale renewable hydrogen projects.
Critical Minerals Strategic Reserve — antimony, gallium and rare earths, supporting clean energy and advanced manufacturing supply chains.

Key Takeaways If you already have solar but no battery, the economics are genuinely shifting. The new market participation rules turn a home battery from a cost-saving tool into a small income-generating asset — worth understanding before your next energy decision.

👵 🔴 Taking a Hit

Older Australians (65+)

The extra private health insurance rebate for over-65s is gone.

Age-based rebate scrapped: Previously, 65–69s claimed 28% and over-70s claimed 32% of their private health premiums. Now everyone receives the standard 24% rebate, regardless of age.
Real cost: An estimated 3M+ Australians will pay an average of $226–$255 more per year on private health premiums.
Partial offset: Free RSV vaccine for over-75s and Indigenous Australians over 60.

Key Takeaways If you or a parent is over 65, get a fresh comparison of your private health cover before the rebate change lands. Many policies bundle features that may no longer be needed — a leaner policy could absorb most of the rebate cut. Either way, factor higher out-of-pocket health costs into your retirement cash-flow plan.

📜 🔴 Taking a Hit

Family Trust Users

Discretionary trusts lose a long-standing tax advantage. This is a structural change for any family or business that distributes income through one.

Minimum 30% tax on distributions from discretionary trusts from 1 Jul 2028. Trustees pay the tax; beneficiaries still declare the income on their return.
Income splitting curtailed: Distributing to adult children or lower-income family members no longer delivers the same tax benefit.
Restructure window: 3-year rollover relief opens 1 Jul 2027 — you can move into a company or fixed trust without an immediate CGT or stamp duty hit.
Exemptions: Fixed trusts, super funds, SMSFs, deceased estates, charitable trusts, primary production income from farms, and certain income for vulnerable young people are not caught.

Key Takeaways Don’t wait until 2028. Review your trust structure in 2026 — the rollover window is generous, but the right answer depends on your income mix, beneficiaries, and assets held. For some families, restructuring to a company or fixed trust will be cleaner; for others, keeping the trust and accepting the 30% floor will still be optimal.

🔑 🔴 Taking a Hit

Renters

The reforms aimed at first home buyers carry a side effect for those not yet ready to buy.

Treasury forecast: Rents rise ~$2/week as a result of negative gearing and CGT changes. Industry groups say the real impact could be larger.
Supply impact: Investor changes are projected to reduce housing supply by 35,000 homes, partly offset by 65,000 new homes from the $2B Local Infrastructure Fund — a net 30,000 over the decade.
Cost-of-living headwinds: Headline inflation is forecast to hit 5% in the June 2026 quarter before easing, with fuel-driven price rises flowing into groceries and other essentials.
No direct rent relief in this Budget for renters not pursuing homeownership.

Key Takeaways If buying is on the horizon, the policy environment is genuinely more favourable than it has been — accelerate your deposit plan, and look hard at First Home Super Saver, Help to Buy, and how a new-build option changes the math. If buying isn’t realistic yet, the priorities are different: build a 3–6 month buffer, lock in renewable lease terms where possible, and use this period to grow capacity rather than just absorb cost.

✈️ 🔴 Taking a Hit

Travellers Heading Overseas

A small but unavoidable hike on anyone leaving the country.

Passenger Movement Charge up from $70 to $80 per passenger from 1 Jan 2027.
Applies to everyone departing Australia by air or sea — regardless of destination or ticket class.

Key Takeaways Minor on a single trip, meaningful for frequent travellers or growing families. If you have overseas travel locked in for 2026, departing before 1 Jan 2027 saves $10 a head — a family of four saves $40.

The tax numbers, clearly laid out!

All tables apply to Australian resident individuals. Medicare Levy (2%) is excluded.

Resident Tax Rates by Income Year

Taxable Income	2023–24	2024–25 to 2025–26	2026–27	2027–28 onwards
$0 – $18,200	Nil	Nil	Nil	Nil
$18,201 – $45,000	19%	16%	15%	14%
$45,001 – $135,000	32.5%	30%	30%	30%
$135,001 – $190,000	37%	37%	37%	37%
$190,001+	45%	45%	45%	45%

Excludes Medicare Levy (2%). LITO and WATO apply on top of these rates.

Additional Offsets Available (from 2027–28)

Offset	Amount	Who Gets It
Low Income Tax Offset (LITO)	Up to $700	Individuals earning under ~$66,667
Working Australians Tax Offset (WATO)	Up to $250	Workers with taxable income from work (13M+ Australians)
Instant Tax Deduction	Up to $1,000 deduction	All workers from 2026–27, no receipts required

How Much Will You Save? (Compared to 2025–26 Settings)

The 2025–26 rate on $18,201–$45,000 sits at 16%. The new cuts reduce this to 15% from 2026–27 and 14% from 2027–28, with the $250 WATO and $1,000 instant deduction stacking on top.

Annual Income	2026–27 Saving	2027–28 Saving (incl. WATO)	2027–28 Saving (incl. WATO + max deduction)
$40,000	~$218	~$441	~$551
$60,000	~$268	~$518	~$628
$81,245 (average)	~$268	~$518	~$838
$100,000	~$268	~$518	~$628
$150,000	~$268	~$518	~$628

Figures are approximate. Use the official Tax Cut Calculator for a personalised estimate.

Timeline: when does it all kick in?

Here’s when the major Budget measures kick in. Bookmark this one.

When	What Happens
1 Apr 2026	Fuel excise cut from 52.6c to 20.6c per litre (3 months); heavy vehicle road user charge drops to zero
30 Jun 2026	ATO temporary relief for fuel-affected businesses ends
1 Jul 2026	Income tax rate on $18,201–$45,000 drops from 16% to 15%
1 Jul 2026	$1,000 instant work expense deduction available with simplified substantiation up to the threshold
1 Jul 2026	$20,000 instant asset write-off made permanent for small businesses
1 Jul 2026	497 additional nuisance tariffs abolished
Jul 2026	Paid Parental Leave increases to 6 months
Jul 2026	3 Day Guarantee childcare subsidy begins
Apr 2027	New Framework Planning delivers more consistent NDIS participant plans
1 Apr 2027	25% FBT discount applies to electric cars over $75,000 (replaces full exemption)
1 Jul 2027	Income tax rate on $18,201–$45,000 drops from 15% to 14%
1 Jul 2027	Negative gearing limited to new builds (for properties bought after Budget night)
1 Jul 2027	New inflation-indexed CGT regime begins for most newly acquired investment assets; minimum 30% tax applies to gains on new assets
1 Jul 2027	Domestic Gas Reservation (20% of LNG exports) begins
1 Jul 2027	Monthly PAYG instalment option available to businesses
1 Jul 2027	Rollover relief for discretionary trust restructuring opens (3-year window)
1 Jul 2027	Venture capital tax incentive expansion
2027–28	Working Australians Tax Offset ($250) begins — permanent annual offset for 13M+ workers
1 Jul 2028	Minimum 30% tax on discretionary trusts takes effect
1 Jul 2028	R&D Tax Incentive reforms take effect (higher offsets, new thresholds)
2028–29	Loss refundability for start-ups begins (first two years of operation)
1 Apr 2029	25% FBT discount extends to all eligible electric cars regardless of price

The Bottom Line

This is a Budget built for a more uncertain world, and it doesn’t land equally. Workers get real, if modest, tax relief.

Aspiring homeowners get the most favourable policy environment in years. Small businesses get long-overdue certainty on the asset write-off.

But property investors face a real shift for future purchases. Renters aren’t directly helped. Older Australians lose a health insurance benefit. And anyone holding wealth through a discretionary trust needs to plan now, not later.

The practical question is always the same: how does this change your position, and what’s the smartest next move?

Need Help?

Do you need help navigating the 2026–27 Federal Budget?

Whether it’s making sense of the new tax cuts, understanding how the negative gearing and CGT changes affect your investment strategy, or just figuring out what to do next — we’ve got you covered.

As always, the MAD Wealth team is ready to help you turn Budget announcements into real financial wins. Let’s make the most of these opportunities together!

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