What the Budget means for you

A plain-English summary of the key tax and superannuation changes announced on 12 May 2026, and what they mean for your wealth journey.

The Bigger Picture: Aligning Capital with Labour

As the tax profession begins to absorb these Budget measures, it is clear to me that this goes beyond concepts like “intergenerational equity” or “shifting the scales in favour of first home buyers.” Rather, it reflects a broader policy shift: more closely aligning the taxation of income from assets with that of income from labour.

This is evident in proposals to:

• → Extend CGT changes across all asset classes, including shares and crypto, not just residential property.
• → Introduce a 30% minimum rate on capital gains to ensure tax outcomes are “commensurate with the tax rate paid by most workers”.
• → Introduce a 30% minimum rate on trust income to similarly “better align the tax rate on trust income with the tax rates paid by workers”.

Taken together, these measures signal a clear policy intent to significantly curtail income-splitting arrangements. Such arrangements, in all forms, are not only discouraged: they may become economically unviable.

This extends beyond personal services income and professional practice profits, targeting general business and investment income more broadly.

50% CGT Discount is Changing

The long-standing 50% CGT discount for individuals, trusts and partnerships will be replaced by a new system for assets sold from 1 July 2027.

• ✓ Gains arising before 1 July 2027 (50% discount still applies).
• ✓ New residential property builds (choose between old or new method).
• ✓ Age Pension and income support recipients (exempt from minimum tax).
• ✗ Pre-1985 CGT asset exemption REMOVED (surprise inclusion).

Established Property Losses Ring-Fenced

From 1 July 2027, losses from established residential properties can only be offset against property income, not salary or other income.

• ✓ Properties purchased before 7:30 PM AEST on 12 May 2026 are fully grandfathered.
• → Excess losses carried forward and offset against future property income.
• ✓ New builds remain fully negatively gearable against all income.
• ✗ Established property acquired after 12 May 2026 (new rules apply).
• ✓ Non-residential property and shares (no change).
• ✓ Properties in SMSFs and widely held trusts (excluded from changes).

If you’ve already bought, or are under contract, you’re grandfathered. New purchases need careful structuring.

30% Minimum Tax on Discretionary Trusts

From 1 July 2028, trustees will pay a minimum 30% tax on all taxable income of discretionary (family) trusts. Beneficiaries receive non-refundable credits for the tax paid.

• ✓ SMSFs and complying superannuation funds.
• ✓ Fixed and widely held trusts.
• ✓ Special disability trusts and charitable trusts.
• ✓ Deceased estates.
• ✓ Unit trusts and managed investment schemes.
• ✓ Primary production income and certain minor income.

Parental Leave Super Extended

PPL increases to 6 months from 1 July 2026. Super contributions flow on the full 26-week period, reducing the retirement savings gap from career breaks.

• ✓ Super on PPL commenced from 1 July 2025.
• ✓ Now extends to the full 6-month PPL scheme.

ATO Super Data Sharing Explored

$62 million allocated to explore enabling taxpayers to share ATO-held super data via the Consumer Data Right, a pain point since 2016.

• ✓ Faster, more accurate super advice for clients.
• ✓ Major benefit for SMSF advisers.
• → Still exploratory, not yet legislated.

Stronger Fraud Protection

$86.3 million over 4 years to modernise real-time fraud detection in tax and super, including live monitoring of high-risk super changes.

• ✓ ATO can pause debt recovery where tax agent fraud is proven.
• ✓ Garnishee powers extended to jointly held assets.
• ✓ Live monitoring expanded to tax agents and business.

Prospect of Double Taxation

Of particular concern is the proposal to deny corporate beneficiaries any credit, refundable or otherwise, for tax paid at the trust level. This raises the prospect of effective double taxation.

This extends beyond personal services income and professional practice profits, targeting general business and investment income more broadly.

Who Falls Through the Cracks?

These outcomes do not fully account for:

• ✗ Taxpayers on genuinely lower incomes who would otherwise pay below 30%.
• ✗ Younger investors entering through shares or ETFs (property is beyond their reach).
• ✗ Start-ups undertaking high-risk activities.
• ✗ Significant cost, time and complexity of restructuring business and family group arrangements.
• ✗ Interactions with other regimes including family trust distribution tax on asset transfers.
• ✗ State-based tax implications, notwithstanding any CGT rollover relief.

Complexity Is the Real Risk

Layering these changes onto an already complex system is unlikely to result in meaningful simplification. On the contrary, there is a real risk of increased complexity and uncertainty.

In this context, genuine consultation will be crucial. While elements of these reforms have been the subject of public debate for some time, the legislation, when drafted, must accurately reflect the policy intent without creating unintended consequences.

We welcome your perspectives on these proposed measures as we prepare to engage with the Government on their design and implementation.