Australian tax changes for 2026-27: the full list

A lot changed with the introduction of the 2026-27 federal budget, and the news coverage co-mingles two very different things: the measures that are now law, and measures that were only announced. Some of what you read about will actually affect you on your next tax return. Some of it may never actually happen. This article walks you through all of it, breaks down which is which, and points you to the detail where you need more information.

The budget at a glance

Legend: Law passed Parliament Announced budget measure, not yet legislated Proposed out for consultation, could still change.

For workers

The income tax cut: 16% becomes 15%

From 1 July 2026, the 16% rate on income between $18,201 and $45,000 drops to 15%. It falls again to 14% from 1 July 2027. Everyone earning above $18,200 gets something, because we all pay tax in that band, but the dollar saving is capped at that slice of income, so it is worth the same flat amount whether you earn $50,000 or $500,000 a year. This one is now law.

Work out your actual take-home under the new rate with the take-home pay calculator, or check the low income tax offset calculator if you are near the bottom of the scale.

The $1,000 instant work deduction

From your 2026-27 return, you can claim a flat $1,000 in work-related expenses without a single receipt and without having to prove you spent it. If your real work expenses are under $1,000, you just claim the $1,000 instead. If they are over, you keep itemising as normal. It is law, sitting in the same Act as the negative gearing and CGT changes.

For most people this is worth a few hundred dollars at their marginal rate, for no extra effort. It's minor but it's a change most low income Australians will feel directly.

See what it does to your refund with the tax refund calculator. If you work from home, the work from home tax calculator shows whether itemising still beats the flat $1,000.

The $250 Working Australians Tax Offset

A permanent offset of up to $250 for people who earn income from work, reaching around 13 million Australians. Worth noting it does not start until 1 July 2027, so it will not show up on your first post-budget return. Also now law.

For property investors

Negative gearing wound back

From 1 July 2027, the rules that let investors deduct rental losses against their salary are being tightened. This is one of the biggest structural changes in the budget and it is now law after passing in June 2026. Existing arrangements and the exact grandfathering are where the detail matters, so we have a full breakdown.

Model your position with the negative gearing calculator. Full guide: Negative gearing changes in Australia.

CGT: the 50% discount is going

Also from 1 July 2027, the flat 50% capital gains tax discount is replaced with a system that only discounts the part of your gain caused by inflation (CPI indexation). Low-return, long-held assets can end up better off. High-return assets get taxed more. Gains are also split at the 1 July 2027 line, so the timing of a sale suddenly matters a lot. Now law.

The capital gains tax calculator works out the split across the 2027 line for you. Full guide: Capital gains tax changes in Australia.

For high earners and super

Division 296: extra tax on big super balances

From 1 July 2026, an extra 15% applies to the earnings on the portion of a super balance above $3 million, with a further 10% kicking in above $10 million. It is assessed on your balance at 30 June each year. This was legislated back in March 2026 and it is live now, so it belongs on this list even though it was not a fresh budget-night announcement. The $3m threshold is per person, so a couple can hold up to $6m between them before it impacts.

Division 293: the high-earner super surcharge

Not a new budget measure, but people ask about it. Division 293 adds 15% to concessional super contributions once your income plus contributions crosses the threshold. The threshold moved for 2026-27.

Check where you land with the Division 293 calculator.

The 30% minimum tax on discretionary trusts

This is the one to be careful about, because a lot of coverage reported it as a done deal. It is not. A proposed 30% minimum tax on discretionary (family) trust distributions was announced for 1 July 2028. It drew criticism but is still in consultation, not in the Act that passed in June. After heavy pushback, testamentary trusts (the kind set up through a will) were carved out in June 2026. So: proposed, not law, and already softened once. Worth watching closely, but not worth panicking over. Many businesses did still look into restructuring after the announcement.

For small business

Brief, because these are business related rather than personal measures:

• $20,000 instant asset write-off made permanent from 1 July 2026 for businesses with turnover under $10 million. Announced in the budget, not yet legislated, so treat the "permanent" part as intended rather than locked in.
• Loss carry-back reintroduced from 1 July 2026 for companies with turnover under $1 billion.
• R&D and venture capital incentives enhanced.
• ATO given an extra $700 million for compliance.

Related, but not from this budget

People search for these alongside the budget, so worth addressing:

• HECS/HELP changes came from separate 2025 legislation, not this budget. See HECS repayments in Australia.
• Salary sacrifice rules were not changed by the budget, though the tax cut slightly shifts the maths. See Salary sacrifice in Australia.

Our take

There are mixed opinions, and some real controversy, around the latest budget changes. They were proposed in the name of intergenerational equity, but there are open questions about whether they deliver it.

Broadly, we think the changes to property are positive, since housing used as a speculative vehicle can do real damage to affordability. But we also believe a lot of these changes went too far, and could lead to broader capital flight and a hit to innovation.

On tax cuts, this budget was a lot of take and not much give. Bracket creep is still prevalent, taxes are rising, and the cuts are minimal at a time when belts are tightening everywhere.

Worth noting: public pushback has already forced changes and carveouts, and not all of the proposed measures are law yet.

Frequently asked questions