The May 2026 Federal Budget announced one of the most substantial packages of Australian tax reform in many years, with significant changes proposed across capital gains tax, negative gearing, discretionary trusts, individual deductions and offsets, business losses, venture capital and the R&D tax incentive.
Four months later, the picture is becoming much clearer.
Some of the headline measures — including the core CGT and negative-gearing reforms — have already been legislated. Others remain the subject of consultation or exposure draft legislation, while further detail continues to emerge around how the new rules will operate in practice.
The table below provides a concise snapshot of the principal tax measures announced in the Budget and their status as at 25 September 2026.
For taxpayers, investors and advisers, the important distinction is increasingly not what was announced on Budget night, but what has actually become law, what is still being designed, and when each measure will commence.
The 2026 Federal Budget tax package is no longer simply a collection of policy announcements.
Several major reforms have already passed into law, including the new CGT framework and restrictions on negative gearing of residential property, while other important measures — particularly those affecting discretionary trusts, innovative businesses, venture capital and R&D — remain subject to further legislative development.
That distinction matters. Tax planning based only on the original Budget announcements can quickly become outdated as measures are amended, refined or supplemented during the legislative process.
Gavel Law will continue to monitor the progression of these reforms from Announcement → Consultation → Exposure draft → Bill → Legislation → Commencement, with particular attention to changes affecting privately owned businesses, trusts, investors and property owners.
Disclaimer: This article provides general information only and is not legal, taxation, financial or investment advice. Tax outcomes depend upon individual circumstances and the legislation applicable at the relevant time. Professional advice should be obtained before acting on any of the matters discussed.
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| Budget measure | Budget proposal | Current status | Brief comment |
| CGT discount / indexation | Replace 50% discount with inflation-based cost-base indexation for gains accruing after 1 July 2027 | 🟢 Legislated | Core rules enacted in Treasury Laws Amendment (Tax Reform No. 1) Act 2026, assented 26 June. Further technical “Tranche 2” amendments were exposed in August. (Federal Register of Legislation) |
| 30% minimum tax on capital gains | Minimum 30% tax rate on real capital gains from 1 July 2027, subject to exceptions | 🟢 Legislated | Enacted with the CGT reform. Separate Income Tax Rates legislation also received assent on 26 June. (Federal Register of Legislation) |
| Negative gearing — residential property | Limit negative gearing to new builds from 2027–28; Budget-night holdings grandfathered | 🟢 Legislated | Core rules enacted in Tax Reform No. 1. Further technical rules, including inheritance/relationship-breakdown cases, subsequently progressed through Tranche 2. |
| Innovative/start-up CGT concession | Special treatment to preserve incentives for investment in innovative businesses | 🟠 Exposure draft / consultation | Initial consultation June–July. Revised Innovative Business CGT Concession exposure draft released September: broadly a 50% CGT concession for qualifying early-stage investments. Consultation closes 28 September. (Consult hub) |
| Discretionary trust 30% minimum tax | Trustee-level minimum 30% tax from 1 July 2028 | 🟠 Exposure draft — not yet law | Treasury consultation in July, followed by draft legislation released 3 September. Includes exemptions and a new fixed-distribution election alternative to restructuring. (Treasury Ministers) |
| Trust restructuring rollover | Three-year rollover window from 1 July 2027 for affected trusts | 🟠 Part of trust exposure draft | Still dependent on enactment of the trust package. (Treasury) |
| $250 Working Australians Tax Offset | Annual offset from 2027–28 | 🟢 Legislated | Included in Tax Reform No. 1. |
| $1,000 standard work-expense deduction | Deduction without receipts from 2026–27 | 🟢 Legislated | Included in Tax Reform No. 1. |
| Two-year company loss carry-back | Permanent loss carry-back for companies with turnover under $1bn from 1 July 2026 | 🟢 Legislated | Enacted in Tax Reform No. 2 Act 2026, assented 26 August. (Federal Register of Legislation) |
| Permanent $20,000 instant asset write-off | Permanent for eligible small businesses | 🟢 Legislated | Also enacted in Tax Reform No. 2. (Federal Register of Legislation) |
| Start-up loss refundability | From 1 July 2028, qualifying start-ups can obtain refunds of losses, capped by employment-related taxes paid | 🟡 Announced; legislation still to come | Government continues to state the policy, but I have not found an exposure draft or Bill yet. (Treasury Ministers) |
| Venture-capital tax incentives | Increase VCLP/ESVCLP thresholds and limits from 1 July 2027 | 🟠 Exposure draft / consultation | Draft legislation released September; consultation closes 28 September. (Consult hub) |
| R&D Tax Incentive overhaul | Higher rates for core R&D but tighter eligibility; new thresholds and age limits from 1 July 2028 | 🟠 Exposure draft / consultation | Draft legislation released September; consultation closes 28 September. (Consult hub) |
| EV fringe-benefits-tax concession | Replace full exemption progressively with permanent 25% FBT discount | 🟠 Draft legislation / consultation | Draft legislation released September; consultation closes 28 September. (Consult hub) |
| Monthly PAYG instalments | Allow voluntary monthly PAYG instalments from 1 July 2027 and require them for some non-compliant taxpayers | 🟠 Draft legislation / consultation | Exposure draft currently open; closes 28 September. (Consult hub) |
| Pillar Two “side-by-side” package | Amend Australian global/domestic minimum-tax rules following OECD changes | 🟠 Consultation / implementation progressing | Treasury consulted on amending legislation; this sits somewhat outside the headline domestic tax-reform package. (Treasury) |
| Foreign-resident CGT reforms / renewable-energy concession | Adjust foreign-resident CGT rules, including transitional/renewables treatment | 🟢/🟠 Substantially progressed separately | Part of the broader Budget tax program; relevant legislation has subsequently passed Parliament, although this is distinct from the domestic CGT-discount reform. (Treasury Ministers) |
