The 2026-27 Federal Budget, Decoded for Australian Property and Business Owners.

If you read nothing else, read this. The five measures below are the ones that will shape financial decisions for most Australian households and small businesses across the next decade.

If you are saving toward your first home, the Budget did not change the schemes you rely on. The expanded First Home Guarantee, which allows eligible buyers to purchase with a 5% deposit and no Lenders Mortgage Insurance, remains in place with no place limits and no income caps following its May 2026 expansion.

What changed is the competitive landscape. With negative gearing pulled back on established homes from 1 July 2027, Commonwealth Bank's house view is that established property prices will sit roughly 3% lower than they otherwise would have been across the forecast horizon. Investor demand is expected to shift toward new builds, where the existing tax treatment is preserved in full.

What This Means for You

• Less investor competition on established homes is genuine but partially offset by lower listing volumes as grandfathered investors hold rather than sell.
• New builds will attract more investor buyers, which may push up competition and pricing in the off-the-plan and house-and-land market specifically.
• The $10bn housing supply program announced in the Budget is targeted at building 100,000 homes for first home buyers at below-market prices, with construction starting in 2026-27 and the first homes available in 2028.
• Help to Buy has been expanded with around $800m to lift property price caps and income caps, broadening eligibility for the shared-equity scheme.

The Budget did not make property a bad investment. It made one specific kind of residential property, new builds, the most tax-favoured residential asset class in Australia.

Two Investors, Same Suburb, Very Different Outcomes

Consider two investors deploying $500,000 into a residential property in 2028, in the same suburb, with the same expected yield and capital growth. One buys an established home. The other buys a new build.

Commonwealth Bank's analysis estimates the removal of negative gearing on an established property is roughly equivalent to 90 to 155 basis points of additional mortgage cost for a highly leveraged investor. Across a typical decade-long hold, the after-tax return on the new build now materially out-runs the established home for the same capital outlay.

What About Build-to-Rent and Affordable Housing?

Negative gearing exemptions also apply to widely held trusts, complying superannuation funds, build-to-rent developments and properties supporting government housing programs. The build-to-rent concessional tax settings remain in place, but the Government tightened the affordability requirements that developments must meet to qualify.

If you acquired your investment property before 7:30pm AEST on 12 May 2026, the negative gearing grandfathering rule applies to that asset. The existing negative gearing rules continue for as long as you hold the property, regardless of when you eventually sell.

Capital gains tax is treated differently, and this is where a lot of public commentary has been imprecise. The CGT changes commencing 1 July 2027 apply to all CGT assets, and there is no separate CGT grandfathering tied to the 12 May 2026 cutoff. Instead, a transitional rule splits the gain on disposal.

How CGT Is Calculated on a Grandfathered Property Sold After 1 July 2027

On disposal, the capital gain is apportioned into two periods using a 1 July 2027 valuation, either a formal valuation or an ATO-approved apportionment method.

In practice this means a 1 July 2027 market valuation is a planning item, not an optional one. Without it, you will be relying on the ATO's apportionment formula by default, which may or may not be favourable depending on the asset's growth profile.

Three Things to Model This Quarter

1. Refinance review. Your existing investment properties still carry the preserved negative gearing position, which may shift your equity position and unlock borrowing capacity to acquire a new build under the preserved rules.
2. Hold versus sell timing. The longer you hold past 1 July 2027, the more of the eventual gain falls under the new CGT regime. The trade-off against the preserved negative gearing on the holding period is now a genuine modelling exercise, not a default to hold.
3. 1 July 2027 valuation planning. A formal valuation as at 1 July 2027 may produce a better outcome than the ATO's default apportionment method for assets with a non-linear growth profile. Worth raising with your accountant well ahead of the date.

Most Budget commentary aimed at small business leads with the $20,000 instant asset write-off being made permanent. That is true, and it is useful. It is also the least interesting thing the Budget did for owner-operators with retained profits.

The Three Measures, in Order of Impact

The Budget introduced a 30% minimum tax on discretionary trusts. The measure starts on 1 July 2028, with a three-year rollover relief window from 1 July 2027 to 30 June 2030 for groups that want to restructure.

How the New Trust Tax Works

• Trustees of discretionary trusts pay a minimum 30% tax on taxable income distributed to beneficiaries.
• Beneficiaries receive non-refundable credits for the trustee-paid tax, which can be applied against their own income tax liability.
• Beneficiaries on marginal rates below 30% cannot recover the excess as a refund, which compresses the historical income-splitting benefit.
• Corporate beneficiaries are not entitled to the credit, which raises a double-taxation question that family groups using bucket-company strategies will need to model carefully with their accountant.
• Fixed trusts, widely held trusts, complying superannuation funds, charitable trusts, special disability trusts and deceased estates are excluded. Testamentary trusts in existence before 12 May 2026 are also excluded.

The replacement of the 50% CGT discount with cost base indexation plus a 30% minimum tax is the broadest measure in the Budget. It applies to all CGT assets held by individuals, trusts and partnerships, not just residential property. That includes share portfolios, business goodwill on sale, cryptoassets and most capital investments.

The Key Transition Rules

• Gains accrued before 1 July 2027 retain the 50% discount. Only the portion of the gain accruing after 1 July 2027 is subject to the new indexation and 30% minimum tax.
• Main residence CGT exemption is unchanged. Selling your family home generally remains tax-free under the existing rules.
• Income support recipients, including Age Pension recipients, are exempt from the 30% minimum tax.
• New build investors can elect either the 50% discount or the new indexation regime at the time of disposal, whichever produces the better outcome.

The decisions worth making now are not dramatic. They are about getting your existing position reviewed, modelled and documented while the rules are clear and the implementation dates are still more than a year away.

1. If you already own an investment property, get a refinance and equity review. Your after-tax position has shifted, and your borrowing capacity may have shifted with it.
2. If you are saving for your first home, confirm your eligibility for the First Home Guarantee and Help to Buy, and start the application process. The schemes are intact; what changes is the supply backdrop you will be buying into.
3. If you are weighing a new investment, model the after-tax return on a new build against the alternatives you were already considering. The comparison is genuinely different to the one you would have run a fortnight ago.
4. If you were planning a fresh trust for a future property purchase, pause. Talk to your accountant about whether the structure still makes sense before you set it up.
5. If you are a small business owner with retained profits, bring your broker, accountant and planner into the same conversation. The cross-disciplinary work across the next 14 months will save more money than any single specialty does alone.

The questions Australians are asking us most often about the Budget, answered in plain English.

Everything on this page is drawn from the following sources, verified at the date of publication.

• MFAA: Federal Budget 2026-27 policy and advocacy summary
• Australian Treasury: Tax Reform, Budget 2026-27
• Australian Taxation Office: $20,000 instant asset write-off
• Commonwealth Bank: 2026 Budget Updated Housing Outlook
• Pitcher Partners: Federal Budget 2026-27 Minimum tax on discretionary trusts
• Baker McKenzie: Budget Bites, CGT Discount and Negative Gearing