Your wealth strategy and the 2026-27 Budget
Financial Advice
07-07-2026
Your wealth strategy and the 2026-27 Budget
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Following our recent Wealth Insights on the 2026–27 Federal Budget, we wanted to take a closer look at what these changes could mean for our clients, their families, and their long-term wealth building strategies.
While much of the public discussion has centred on individual tax measures, we believe the more significant development is the widening gap between how wealth is taxed inside and outside of superannuation.
Harrison Mathias, Self-Managed Super Fund (SMSF) Manager at Partners Wealth Group explains,
“For many clients, our key message is not to rush, but to review. Structural changes like these create an opportunity to reassess whether existing arrangements are still fit for purpose and whether they are being used in the most tax-effective way”
The proposed changes to capital gains tax, negative gearing, discretionary trusts, individuals, and businesses create a new planning landscape, particularly for investors with property holdings, family trusts or long-held assets outside super. Moreover, the recently announced restriction on SMSF’s borrowing to purchase residential property may force trustees to pivot their property strategy, with business real property emerging as the only remaining avenue for geared exposure inside an SMSF.
Does this Budget proposal really matter?
Yes. The proposed changes target tax settings that have historically influenced investment decisions, with a clear policy preference towards superannuation and, at least in principle, new housing supply.
As a result, the implications are less about immediate cash flow and more about the relative attractiveness of different ownership structures, investment vehicles and wealth-building strategies.
“The biggest theme we are seeing is how tax changes are likely to influence investment behaviour in the short to medium term,” says Partners Wealth Group Director of Wealth, Rob Hand. “As the relative appeal of different structures changes, investors are likely to reassess where they hold assets and using the example of Australian shares will likely focus more on franked income than long term capital growth The opportunity cost on wealth creation here for an individual could be quite large.
When the rules change, the after-tax outcome of selling an asset, distributing trust income or holding property through one structure rather than another can shift significantly. That’s why this Budget is as much about structure and timing as it is about tax rates.
What is changing
The proposed reforms include changes to:
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From 1 July 2027 Capital gains tax The 50% CGT discount is replaced by cost base indexation and a 30% minimum tax on net capital gains. Applies to individuals, trusts and partnerships. Companies and superannuation funds are not affected |
From 1 July 2027 Negative gearing Net rental losses on established residential investment properties acquired after Budget night (7:30pm AEST, 12 May 2026) can no longer be deducted against other income from 1 July 2027. Commercial property, shares and all other asset classes are completely unaffected. |
From 1 July 2028 Discretionary trusts A 30% minimum tax on the taxable income of most discretionary trusts. A 3-year rollover relief window (1 July 2027 to 30 June 2030) provides a path to restructure with CGT concessions. |
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From 1 July 2026 Superannuation No new superannuation tax changes in this Budget. Division 296 – the additional tax on balances above $3m – received Royal Assent on 13 March 2026 and commences 1 July 2026. The Government has also recently restricted the use of LRBAs for residential properties in SMSFs, due to come into effect 10 August 2026. |
From 1 July 2026 Individuals Lowest marginal rate drops from 16% to 15% on 1 July 2026, and then to 14% on 1 July 2027. New $250 Working Australians Tax Offset from 2027-28. $1,000 instant work-related deduction from 1 July 2026. |
From 1 July 2026 Business $20,000 instant asset write-off made permanent. Two-year loss carry-back made permanent. Payday Super begins 1 July 2026. R&D Tax Incentive overhaul from 1 July 2028. |
What it means for clients
For investors, the practical question is no longer just “What return will this asset generate?”,
It’s now, “Where should this asset be held, and what will the tax outcome look like when I eventually sell or distribute income?”
That applies particularly to clients with:
- unrealised gains
- family trusts
- investment properties
- business interests held outside super
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Property investors The negative gearing changes may reduce the after-tax appeal of purchasing established residential property after the Budget cut-off. |
Families using trusts The new minimum tax changes the value of distribution planning and may make it worthwhile to revisit whether the current structure still serves its intended purpose for trusts where all beneficiaries have lower tax rates |
Clients with long-held assets The transitional rules create an important record-keeping issue. A reliable valuation at 1 July 2027 may become critical for determining how much of a future gain is taxed under the old rules and how much falls under the new regime. |
Actions to consider now
The most useful step for clients is a structured review rather than a reactive one.
Start by:
- identifying assets with unrealised gains
- checking how they are owned
- asking whether the current structure is still the most tax-effective option over the long term
Partners Wealth Group Advisor lens
The Budget does not demand immediate action from every client, but it does justify a fresh conversation with your Advisor about structure, ownership and timing.
The main risk is not a missed deadline today; it is leaving a portfolio or trust arrangement unchanged until the new rules are already in force. That is especially true for families with property, private company interests or intergenerational assets, where the tax consequences of inaction may be significant.
Take the time to understand how the proposed changes interact with your broader objectives, existing structures and long-term plans before making any decisions. If you’d like to discuss what this means for your situation, you can request a call back here.
Sources
https://treasury.gov.au/policy-topics/taxation/budget2026-27
https://cms.pwg.com.au/media/evcfq0pt/v14-2026-27-federal-budget-pwg.html
https://budget.gov.au/content/04-tax-reform.htm#wato
This material contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. Authorised Representative of Partners Wealth Group Financial Advice Pty Ltd AFS Licence No. 558563 | ABN 33 662 748 496.