Our take on last night’s budget
Interpret as you will…
Truly though, let’s nudge this into perspective.
Here’s what last night’s announcements mean for you - no spin, no panic.
We know your inbox is already full of budget takes. Here’s ours: breathe.
The headlines are loud - and we’ve got time to do this properly.
Treasurer Jim Chalmers called last night’s budget “the most ambitious in decades.” And in some ways, he’s right - particularly around property and investment tax. But ambition in Canberra doesn’t always equate to the nudge you need.
Rest assured, we’re working through the detail now and thinking through next moves in the right direction in response to the announcements made, which we’ll discuss with clients in upcoming tax planning discussions.
Here’s our summary on what you need to know.
NEGATIVE GEARING
From 1 July 2027, residential investment properties will no longer be eligible for negative gearing against other income like wages unless they relate to new builds. But here’s the important part: if you already own investment properties, you’re fully grandfathered - nothing changes for you.
The Nudge: No change for existing investors
CAPITAL GAINS TAX
The 50% CGT discount will be replaced from 1 July 2027 with cost-base indexation (meaning you pay tax on real gains after inflation) at a minimum 30% rate. Main residences and super are completely untouched. The new approach to taxing capital gains only apply to gains arising after 1 July 2027, with gains made up until 30 June 2027 being taxed under the existing rules.
The Nudge: Takes effect 1 July 2027, valuations will be important
TRUSTS
From 1 July 2028, trustees will be taxed at 30%, reducing the income-splitting benefit and tax deferral opportunity provided when coupled with a bucket company. There are carve-outs for farmers and primary producers. We have two full years to plan ahead, and that matters.
The Nudge: Takes effect 1 July 2028, pre-emptive restructuring is on the cards
EVs AND FBT EXPEMPTION
The 100% FBT exemption on electric vehicles is being phased out - but not immediately. The full exemption continues for existing EVs until 1 April 2029, before reducing to a permanent 25% FBT discount. EVs purchased after 1 April 2027 under $75,000 keep the full exemption until 1 April 2029.
The Nudge: The tax concession attached to company-owned EVs is ending, meaning the business use of your EV will matter from 1 April 2029.
GOOD NEWS FOR SMALL BUSINESS
The $20,000 instant asset write-off is now permanently extended from 1 July 2026 for businesses with turnover under $10 million. A new loss carry-back scheme also means if you run at a loss in a particular year, you can claim a refund against tax paid in the prior two years - a real cash flow boost.
The Nudge: Effective now!
TAX CUTS FOR WORKERS
A new $1,000 instant tax deduction applies from this year’s return - no receipts required. A new $250 Working Australians Tax Offset also arrives from 1 July 2027, on top of already-legislated tax cuts. Combined, average earners could be up to $2,816 better off by 2027–28.
The Nudge: $1,000 deduction this tax year
DON’T LET NOISE DRIVE THE DECISIONS
The most important thing we can tell you right now is this: don’t act in haste. The changes that matter most - CGT, negative gearing, trusts - all have transition periods built in. The government has deliberately grandfathered existing arrangements to avoid exactly the kind of panic that budget night can create.
Our job is to look at your specific situation - your business structure, your trust arrangements - and figure out what, if anything, needs a little nudge into shape - in a way that makes sense for you, not just in response to a headline.
For existing clients, we’re working through the detail now and we’ll be in touch with anything that’s specifically relevant to you.
Not a client but feel like you need a bit of a nudge on the right direction? Contact us.