Taxation
Working Australians Tax Offset (WATO) - a $250 permanent annual tax offset will be available to Australian workers from the 2027-28 financial year, lifting the effective tax-free threshold to $19,985. While it offers broad-based relief for middle-income earners, retirees and welfare-dependant Australians miss out, and the delayed timing reduces any immediate cost-of-living benefit.
Marginal Tax Rates - already legislated, the 16% marginal tax rate drops to 15% from 1 July 2026, and to 14% from 1 July 2027 — worth up to $536 per year for most taxpayers.
Capital Gains Tax - from 1 July 2027, the 50% CGT discount will be replaced with cost base indexation and a 30% minimum tax on gains. Gains arising before that date are unaffected. The impact varies significantly depending on your income, how long you've held the asset, and the inflation environment over that period. For many investors, the window to act under the current rules closes 30 June 2027.
Negative Gearing - limited to new builds from 1 July 2027. Properties held before Budget night are fully grandfathered.
Discretionary Trusts - a 30% minimum tax on trust distributions from 1 July 2028. Combined with the CGT changes, the effectiveness of trust structures for wealth accumulation will be materially reduced. Rollover relief is available for those who wish to restructure.
Business - the $20,000 instant asset write-off is permanently extended from 1 July 2026, and a new $1,000 instant deduction for work-related expenses requires no receipts from 2026-27.
Superannuation
No new measures were announced. The previously legislated Division 296 measures commence 1 July 2026.
Aged Care
A $1.7 billion investment targets new bed construction and improvements to Support at Home packages, including removing co-contributions for basic personal care services.
Women and Family
A 3-day childcare guarantee and an extension of Paid Parental Leave to 6 months from July 2026 are the headline measures.
The changes to CGT, negative gearing and trust structures represent the most significant shift in the tax treatment of private wealth in decades. The details matter, and the right response will depend on your individual circumstances. Speak with your Morgans adviser, or Find an Adviser, about what this Budget means for your portfolio and tax position.
