Beyond The Budget 2026 - What Is Proposed & What Can We Do About It

Budget Announcement, Australia, 2026 |

Beyond The Budget - What is Proposed & What Can We Do About It

5th June 2026

You need to plan and focus on what else is important. The budget is used by politicians as a part of their re election campaign. We will leave that to the reader to consider. Many of the measures also have an ideological component but, again, this is for reader consideration. The guidance I am providing focuses on what you can do to put yourself in a better financial position, if and when, the new measures are implemented.

Over the years, the smarties in tax, which include us, have adjusted our clients’ affairs to minimise our clients’ taxes. The best way for the government to counter this is to turn the system on its head and force us to start again. This Budget does this for certain parts of the tax system.

But those affected by the Budget can get in front by restructuring and re-evaluating their tax strategies. First, it is important to remember that until the legislation passes Parliament, we will not know the full details of how these measures will operate.

“Superannuation remains a good tax minimisation strategy.”

Negative gearing: If you make a net loss on the rental of a residential property, you will not be able to offset that against other income like your salary. This is to start on 1 July 2027. Most investors only have one rental property, and if that starts off negatively geared, then after some years it becomes positively geared. (The very rich do not negatively gear as they have more cash than they know what to do with!) It is important to remember that a net loss on one property can be offset against the net rent of another property. As you can negatively gear nonresidential property, small shops, small offices, and factory units will replace the residential unit as investment opportunities.

Capital Gains Tax changes: We are going back to indexation for inflation on the original cost of the property. This will replace the 50% discount. The pre-Budget assets that may incur capital gains will now be caught with the market value at 1 July 2027 being the cost base. There should be no need to go and sell your asset to avoid this change.

Taxation of Trusts: This does not come in until 1 July 2028, so there is plenty of time to rearrange one’s affairs. But it looks like trusts will no longer be of much use in tax planning.

There are other changes like carry-back losses and instant asset write-off for small businesses. The Budget has lots of exceptions and thus complexities and different start dates for various measures. The only way to work through this is with a meeting with one of our accountants.

Amid all these changes, we are now getting ready to go into a much higher inflationary period. This will also mean higher interest rates as they are needed to compensate for the loss of value of savings. To counter inflation, businesses need to increase prices and employees need increased wages. The argument that you can’t increase wages because you have competitors does not hold. With full employment at present, employees have a bargaining advantage.

You can call us on 02 9496 2300 or email services@pva.com.au

TALK TO ONE OF OUR EXPERTS

Recent

TALK TO US FOR THE RIGHT ADVICE

Our Mission

Talk With Us

Talk With Us

Talk With Us

Tax

Let's Talk

Insurance

Quick Quote

Superannuation & Investment

Let's Talk

Accounting

Let's Talk