The Federal Budget 2026 wasn’t short on headlines. Negative gearing. CGT. Family trusts. But most of the conversation has focused on what’s changing — not on what you need to do about it or when.
For established business owners across Sydney, the more useful question is: which changes create a decision point for your business, your investment structure, or your family group?
At VLL Partners, we’ve been working through the details for our clients since Budget night. Here’s our read on what actually matters — and where early advice makes the difference.
The Three Areas That Need Your Attention Now
1. Business Tax: The Wins Worth Planning Around
The business measures in the Federal Budget 2026 are largely positive — but they won’t deliver value on their own.
The $20,000 Instant Asset Write-Off Is Finally Permanent
From 1 July 2026, the $20,000 instant asset write-off (IAWO) becomes a permanent fixture for businesses with an annual turnover under $10 million. No more waiting on annual extensions. No more guessing whether it will be renewed before you pull the trigger on equipment.
Whether you’re a healthcare practice owner on the North Shore replacing diagnostic equipment or a childcare operator upgrading safety infrastructure, this gives genuine planning certainty. In our experience, the IAWO is most valuable when it’s part of a broader year-end tax planning conversation — rather than a reason to spend for spending’s sake.
Before any purchase, ask: Does this asset improve the business, and will we have enough taxable income to benefit from the deduction this year?
Two-Year Loss Carry Back for Companies
Also from 2026–27, companies with turnover up to $1 billion can apply a current-year tax loss against tax paid in the previous two income years — generating a cash refund rather than a credit carried forward into an uncertain future.
If your company has paid tax in the last two years and you’re facing a leaner 2026–27, model your projected losses now, then talk to your accountant to determine whether you qualify for carryback and how to claim the refund.
Payday Super Starts 1 July 2026
Super wasn’t overhauled in this Budget, but Payday Super remains on track. From 1 July 2026, employers must pay superannuation on the same day as wages — not quarterly.
Read Patrick’s guide on How Australian Businesses Can Prepare for Payday Super.
2. Property, Shares and CGT: The Changes That Reward Early Planning
Capital Gains Tax: Why Valuation Before 30 June 2027 Is Not Optional
This is the change that will catch people who wait.
From 1 July 2027, the 50% CGT discount will be replaced by an inflation-linked discount and a 30% minimum tax on real capital gains.
Two things that often get lost in the headlines:
First, this applies to all CGT assets — not just investment property. Shares, managed funds, ETFs, cryptocurrency, and business assets such as goodwill are all within scope.
So are pre-1985 (pre-CGT) assets that have historically sat outside the CGT system. Any gain accruing on those assets from 1 July 2027 will be taxed under the new rules.
Second, gains accrued before 1 July 2027 are protected. The new rules only apply to gains arising after that date. That means the timing of a sale and the quality of your valuation evidence will matter significantly.
Getting Your Cost Base Right
To correctly split pre- and post-1 July 2027 gains, every CGT asset will need a value established at 30 June 2027. Start compiling a list of all your assets now and make arrangements for their valuation — either via an external valuer or by preparing to use the upcoming ATO formula.
If you hold property, company shares, business goodwill, or any long-held family assets, waiting until you decide to sell leaves you with weaker evidence and fewer options. The valuation obtained as at 30 June 2027 will provide a clean, defensible cost base.
Negative Gearing: Existing Properties Are Protected
From 1 July 2027, negative gearing on residential investment property is limited to new builds. Properties with contracts signed before the Federal Budget 2026 announcement are grandfathered — meaning the old rules remain.
For established properties purchased after Budget night, rental losses can still be carried forward or applied against the eventual capital gain. However, they can’t be offset against unrelated income, such as wages or business profits. Commercial property, shares, and margin loans are unaffected.
3. Discretionary Trusts: Use the Rollover Relief Window
Of all the changes in the Federal Budget 2026, the discretionary trust reforms are the ones our clients are asking about most.
The 30% Minimum Tax From 1 July 2028
A discretionary trust (often called a family trust) allows a trustee to distribute income each year to a defined group of beneficiaries. Families have used them effectively to stream income to adult children or lower-income beneficiaries on lower marginal tax rates.
From 1 July 2028, trustees will pay a minimum 30% tax on the trust’s taxable income. Beneficiaries get a non-refundable credit for tax paid by the trustee, so distributions are effectively taxed at 30%.
This affects roughly 1 million family and small business trusts. But it doesn’t mean every trust should be closed.
What We Recommend
Trusts can still play a valuable role in asset protection, succession planning, and business structuring. The question is whether your trust structure still suits your goals in a post-2028 environment.
A three-year rollover relief window opens from 1 July 2027, helping eligible families and small businesses to restructure. Don’t waste this opportunity by waiting until 2028 to start the conversation.
When a Decade-Old Structure Needs a Second Look
Take Marcus, a North Shore manufacturing business owner in his early 50s. His family trust currently distributes income to two adult children while they build their own careers — a structure that’s served the family well for over a decade.
Under the new rules, those distributions will be subject to a 30% tax regardless of the children’s marginal rates. Marcus and his adviser need to model whether a different income mix inside the trust changes the outcome, or whether a partial restructure during the rollover window is the right move. That conversation should be happening sooner rather than later.
Five Questions to Ask Your Accountant
The Federal Budget 2026 doesn’t require you to solve everything now. Focus on what needs action and by when.
- Does your business qualify for the $20,000 instant asset write-off, and is there equipment or technology that makes sense to purchase this financial year?
- Has your company posted a tax loss in recent years that could be carried back under the two-year carryback for a cash refund?
- Do you hold CGT assets — property, shares, business goodwill, or pre-1985 holdings — that need a valuation?
- Does your discretionary trust still suit your family, succession, and asset protection goals under the new minimum tax?
For many business owners, these questions overlap. A trust may hold business assets. A family group may hold investment property alongside company shares. A business sale plan may now need earlier modelling. That’s where coordinated advice across tax, structure, and planning is vital.
Federal Budget 2026 Frequently Asked Questions
Q: Does the negative gearing change affect investment properties I already own?
No. Properties owned on 12 May 2026 are grandfathered. The new rules apply only to established residential properties purchased after Budget night, and only from 1 July 2027.
Q: Does the CGT change only apply to property?
No. The new 30% minimum tax and inflation-linked discount apply to all CGT assets from 1 July 2027, including shares, managed funds, cryptocurrency, and business assets such as goodwill. Owner-occupied homes and CGT inside superannuation remain fully exempt.
Q: Should I close my family trust before the 30% tax applies?
Not automatically. Many trusts will still serve important purposes for asset protection and succession even after 2028. A structured review before the rollover relief window opens in July 2027 is the first step.
Q: Where should I start?
Start with timing. Immediately prepare your payroll systems for Payday Super, and begin planning CGT asset valuations before 30 June 2027. Schedule a meeting with your adviser as soon as possible to set out a timeline for these steps.
Book a Federal Budget 2026 Review with VLL Partners
Whether you need to review your trust structure, establish CGT valuations, or pressure-test your business tax position, our team of accountants in North Sydney is ready to work through it with you.
Book a Federal Budget review with VLL Partners and get a clear picture of what these changes mean for your specific situation — before the key dates arrive.
