It’s a Budget that aims to tackle issues in the tax system and housing market. There are a wide range of changes that will impact individuals and small businesses.

• Negative gearing – big changes here will restrict negative gearing to newly constructed residential property only, with existing investments as at budget night grandfathered.  

• Capital gains tax (CGT) –  From 1 July 2027, the current 50% CGT discount returns to the pre-1999 inflation indexation approach for all assets outside of super, including pre-1985 assets. From 1 July 2027 a minimum 30% tax rate will apply to capital gains.  

• Discretionary trusts –  a minimum 30% tax rate will apply on distributions from discretionary/family trusts aimed at reducing income-splitting opportunities, with possible carve-outs for primary producers and small family enterprises.  

• Instant asset write-off –  the small business instant asset write-off will be made permanent at $20,000, applying to eligible new and second-hand depreciating assets to support SME cash flow and investment certainty.  

• Health insurance rebate changes for over 65s

• The previously announced NDIS reforms were featured.

This budget includes significant changes in the tax system that will have material implications for financial advice clients and will keep the financial advice profession busy.