The 2026 Federal Budget could materially change how Australians invest, especially around capital gains tax, property investing, family trusts, small business deductions and electric vehicle fringe benefits.

The important word is could.

The Budget announcements still need to become law, and the final rules may change through consultation or Parliament. But the proposals are significant enough that investors should understand the dates, review their records, and avoid making rushed decisions based on headlines.

This is the broad investor summary. For deeper modelling, use our CGT discount vs indexation calculator and read our guide on whether investors should sell before 1 July 2027.

Key Budget dates for investors

Here are the dates that matter most:

• 7:30pm AEST, 12 May 2026: established residential property acquired after this time may be affected by the proposed negative gearing changes.
• 1 July 2026: the $20,000 instant asset write-off for small businesses is proposed to become permanent.
• 1 April 2027: EVs above $75,000 and up to the fuel-efficient luxury car tax threshold would move to a 25% FBT discount for new arrangements.
• 1 July 2027: the 50% CGT discount would be replaced by cost base indexation for gains arising after this date, with a proposed 30% minimum tax on capital gains.
• 1 July 2028: a 30% minimum tax on discretionary trusts is proposed to start.
• 1 April 2029: all eligible EVs would move to a permanent 25% FBT discount, while eligible EVs up to $75,000 provided before that date keep the full FBT exemption.

Capital gains tax: the biggest investor change

Under current rules, Australian resident individuals and some trusts can generally reduce an eligible capital gain by 50% when they sell a CGT asset held for more than 12 months.

The Budget proposes replacing that 50% CGT discount with cost base indexation from 1 July 2027. In plain English, the cost base would be adjusted for inflation so tax is applied to the real gain rather than the nominal gain.

The proposal also includes a 30% minimum tax on gains. NAB notes that this is aimed at stopping investors from realising large gains in low-income years and paying a very low effective tax rate.

For long-term investors, this is the change to model carefully. A 50% discount can be generous when an asset has grown much faster than inflation. Indexation can be more favourable when inflation is high and real returns are lower.

Transitional rules for assets held before 1 July 2027

The Budget materials say the CGT reforms will apply only to gains arising after 1 July 2027. NAB’s analysis describes the practical split:

• assets bought and sold before 1 July 2027 would stay under current rules
• assets bought after 1 July 2027 would be wholly under the new rules
• assets already held before 1 July 2027 and sold later would be split between the old and new systems

For existing assets sold after the transition date, the gain up to 1 July 2027 would use the current rules. The gain after 1 July 2027 would use indexation and the proposed minimum tax, using the asset’s value at 1 July 2027 as a new reference point.

That may make record-keeping and valuation more important. Listed shares and ETFs should be easier to value than private businesses or direct property, but investors should still keep clean records of cost bases, parcels, reinvested distributions and acquisition dates.

Should investors sell before 1 July 2027?

Not automatically.

Selling before 1 July 2027 may lock in current CGT treatment for a realised gain, but it can also bring tax forward, create transaction costs, interrupt compounding and force a reinvestment decision.

The better question is not “will tax be higher later?” It is “does selling now improve the after-tax outcome enough to justify the cost, risk and disruption?”

If you are already planning to sell, rebalance or simplify a concentrated position, the Budget may be a reason to model the timing. If you are a long-term investor holding a diversified portfolio, panic-selling solely because the tax rules may change could be a mistake.

Negative gearing changes for established residential property

The Budget proposes limiting negative gearing to new builds from 1 July 2027.

Existing arrangements would remain unchanged for properties held before Budget night. NAB says the negative gearing changes would apply to established residential properties acquired from 7:30pm AEST on 12 May 2026, while contracts entered into before that time would be grandfathered until the property is sold.

Under the proposed rules, investors who buy established residential property after the Budget-night cut-off would still be able to deduct losses against residential property income and residential property capital gains. Excess losses would be carried forward for use in future years, rather than deducted against wages or other income.

New builds are treated differently. Investors who buy eligible new residential property would still be able to deduct losses from other income, which is intended to focus tax support on new housing supply.

NAB also notes that negative gearing appears to remain viable for non-residential assets such as shares and commercial property. That distinction could matter for investors comparing property, ETFs and other leveraged investment strategies.

Discretionary trusts: proposed 30% minimum tax

The Government proposes introducing a 30% minimum tax on discretionary trusts from 1 July 2028, with some exceptions.

NAB says trustees would pay a minimum tax of 30% on the taxable income of discretionary trusts, and beneficiaries other than corporate beneficiaries would receive non-refundable credits for tax paid by the trustee.

The proposal is not aimed at every trust. NAB lists several expected exclusions, including fixed and widely held trusts, complying super funds, special disability trusts, deceased estates and charitable trusts.

There is also proposed rollover relief for three years from 1 July 2027 to help small businesses and others restructure if appropriate.

If you own assets through a family trust, this is not a DIY moment. The right answer may involve tax, estate planning, asset protection and business succession.

Small business: instant deduction and asset write-off

For workers, the Budget proposes a new instant tax deduction of up to $1,000 from the 2026-27 income year for eligible work-related expenses.

For small businesses, the Government says it will permanently extend the $20,000 instant asset write-off from 1 July 2026 for businesses with turnover up to $10 million. Eligible assets costing less than $20,000 could be immediately deducted, while more expensive assets would continue through the small business depreciation pool.

This matters for investors who also run businesses or side hustles. It may affect the timing of equipment purchases, cash flow and taxable income.

Electric vehicle FBT changes

The Budget proposes moving the EV fringe benefits tax settings toward a permanent 25% discount.

The Government says eligible electric cars costing up to $75,000 will continue to receive a full FBT exemption if the fringe benefit arrangement starts before 1 April 2029. For eligible electric cars above $75,000, the 25% discount would start earlier, from 1 April 2027.

For employees considering a novated lease, this means timing and vehicle price may matter. For business owners, it may affect fleet planning and salary packaging conversations.

What investors should do now

Start with records, not reactions.

For taxable shares, ETFs and managed funds:

• check your cost base records
• identify assets with large unrealised gains
• review dividend reinvestment plan records
• estimate values around 1 July 2027 if the law passes
• model rather than guess

For property:

• confirm acquisition dates and contract dates
• separate established residential property from new builds
• model carried-forward losses if you buy after the Budget-night cut-off
• include transaction costs, stamp duty, agent costs and time out of market

For trusts:

• review trust deeds, beneficiaries and distribution patterns
• ask whether the proposed minimum tax changes the structure’s purpose
• get advice before restructuring

For everyone:

• avoid irreversible decisions based only on headlines
• wait for draft legislation where possible
• seek personal tax advice before selling, restructuring or gearing

The bottom line

The 2026 Federal Budget is not just a one-year tax update. If legislated, it could change the long-term maths for taxable investing, property gearing and trust structures.

But good investors do not need to panic. The practical response is to understand the dates, keep better records, model your likely outcomes and make deliberate decisions.

Use the Budget as a planning prompt, not a trading signal.

Sources

• Australian Government Budget 2026-27: Tax reform
• NAB: 2026 Federal Budget - What it means for Individuals