RBizz Corporate Accountants - Resources #Federal Budget 2026

Federal Budget 2026-27: Key Announcements

Sat, 29 Aug 2026 23:25:12 +1000

Federal Budget 2026-27: Key Announcements

On Tuesday, 12 May 2026, Treasurer Jim Chalmers delivered what is being called the most ambitious Budget in decades. The 2026-27 Federal Budget introduces significant reforms to Capital Gains Tax (CGT) and Negative Gearing to improve housing affordability, while offering permanent relief for small businesses and targeted offsets for workers.

Support for Small Business

Permanent Instant Asset Write-Off: The $20,000 threshold is now a permanent fixture for businesses with turnover under $10 million, starting 1 July 2026.

Loss Carry-Back: Companies under $1B turnover can offset current losses against tax paid up to two years prior, providing a vital cash flow injection.

Trust Reform: A new 30% minimum tax on discretionary trusts arrives in 2028, though a three-year "rollover relief" window will open in 2027 to help businesses restructure into companies or fixed trusts.

Individual & Worker Relief

Tax Offsets: A permanent $250 Working Australians Tax Offset starts in 2027. Additionally, a $1,000 instant tax deduction for work-related expenses (with no receipts required!) begins 1 July 2026 for those with low deductions.

Rate Cuts: Legislated tax cuts will see the 16% rate drop to 15% this July (2026), and further to 14% in 2027.

Federal Budget 2026-27 Spotlight – Negative Gearing

Sat, 29 Aug 2026 23:24:41 +1000

Federal Budget 2026-27 Spotlight – Negative Gearing

Reform of the capital gains tax regime was perhaps the biggest announcement of the 2026-27 Federal Budget, with the 50% CGT discount to all but disappear from 1 July 2027. However, alongside changes to the CGT rules, the Federal Budget announced that the availability of negative gearing would be curbed for residential property investors.

What is negative gearing, and who do these changes affect?

What is negative gearing?

Negative gearing is a term that’s used to describe a situation (most often involving rental properties) where expenses associated with an asset, including any interest expenses, are greater than the income that asset produces.Under current tax rules, a loss that a negatively geared asset generates can be used against an individual’s other income, such as their salary or wages. In the context of rental properties, negative gearing provides investors with a powerful tax deduction that is not available to owner-occupiers.

What’s changing?

At the 2026-27 Federal Budget, the Government announced that, from 1 July 2027, negative gearing for residential property will be limited, and will only be allowed for investments in new builds.

Losses from established residential investment properties will become ring-fenced, meaning they will only be deductible against other income from residential properties, including capital gains. Any excess losses can be carried forward to offset residential property income in future years. This puts an end to an investor’s ability to use rental losses from established residential investment properties to offset other sources of income.

These changes will apply to individuals, partnerships, companies and most trusts.

Transitional arrangements

For established residential investment properties, different transitional measures apply depending on when the property was acquired:

Properties held prior to 7:30pm AEST 12 May 2026 (including where a contract has been entered into, but not yet settled) can continue to be negatively geared – even after 1 July 2027 – until that property is sold. This grandfathering measure allows taxpayers who have already invested in an established residential property to continue to benefit from the existing negative gearing rules.

Properties purchased between 7:30pm AEST 12 May 2026 and 30 June 2027 can continue to be negatively geared until 30 June 2027, but will be subject to the new rules from 1 July 2027.

Properties purchased from 1 July 2027 will be subject to the new rules.

Investments in qualifying new build residential properties are exempt from these reforms, and can continue to be negatively geared before and after 1 July 2027.

This carve out for new builds is an intentional move by the Government, with the hope that investors will turn their interest towards investments in assets that ultimately increase housing stock.

Exclusions

The announced negative gearing reforms only apply to residential property (namely, investments in established residential property). Commercial property and other asset classes (e.g. shares) can still benefit from the existing negative gearing rules.

Similarly, properties in widely held trusts (for example, most managed investment trusts) and superannuation funds (including SMSFs) will be excluded from the reforms, alongside targeted exemptions for build-to-rent developments and private investors supporting government housing programs.

Do the negative gearing changes impact you?

Want to find out more about how the negative gearing or capital gains tax announcements will impact your tax position? Speak to a member of our team today.

Loss carry back: what this means for your startup or small business

Tue, 26 May 2026 22:58:47 +1000

Loss carry back: what this means for your startup or small business

For your startup or small business to succeed, you need to take calculated risks – risks that may entail your business making a financial loss during periods of innovation or expansion.

This spectre of financial loss can be a barrier for risk-averse business owners. But the new loss carry back arrangements, introduced in the Federal Budget 2026, go some way towards reducing the negative impact of financial losses – and encouraging your business to innovate.

Let’s look at what this means in simple terms.

What is a loss carry back arrangement?

Loss carry back arrangements act as a vital fiscal safety net. They allow your business to apply current trading losses against taxed profits you’ve earned in previous years, resulting in a direct cash refund from the government.

By using this mechanism, you effectively get an immediate injection of liquidity during difficult periods, such as unproven research and development or major scaling operations.

What’s the benefit for your business?

By reducing the long-term financial downside of an unsuccessful venture, the government’s new loss carry back policy encourages your business to pursue more ambitious innovation and capital expenditure – strategies you may have avoided previously due to the risk of losses.

As quoted on the Budget website, the aim of this new arrangement is to boost ‘economic resilience, support productivity and promote employment’ in Australian businesses.

How will the loss carry back arrangements work?

From 2026–27, eligible companies that make a loss in the current income year will be able to use that loss to get a refund against tax paid in the prior two income years. This carry back will apply to revenue losses only, and be limited by a company’s franking account balance.

It’s worth noting that loss carry back eligibility is limited to companies with aggregated annual global turnover of less than $1 billion, excluding some high-turnover organisations.

The Government is also introducing loss refundability to support new start‑up businesses. From 2028–29, small start‑up companies in their first two years of operation will be able to get a refund for tax losses, up to the value of fringe benefits tax and withholding tax paid on employee wages. This relief will be available to start-ups with aggregated annual turnover of less than $10 million.

Improved cashflow with the instant asset write-off

The Government is also improving cashflow for small businesses by permanently extending the current $20,000 instant asset write‑off from 1 July 2026.

If you’re a small business with turnover up to $10 million, you’ll be able to immediately deduct eligible assets costing less than $20,000.

Let’s talk about innovation, investment and loss relief

If you’re ready to explore ways to make use of loss carry back arrangements, or the instant asset write-off, please come and talk to our team.

We can help you build a solid innovation strategy, backed by solid tax planning and reliefs.