Tax Planning
How the 2026-27 Budget will reshape tax planning for investors and trust beneficiaries
Major changes in CGT discounts, negative gearing, and trust taxation demand significant shifts in strategic planning for investors and entities.
By NomadicTax Research Team • 5-8 min read • August 5, 2026
## Key reforms investors and trust beneficiaries must plan for
The Australian 2026-27 Budget introduces sweeping changes affecting investment income, capital gains, and trusts. **From 1 July 2027**, the government will:
- Replace the **50% capital gains tax (CGT) discount** with **inflation-adjusted indexation**, ensuring tax is paid only on *real* gains over inflation. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- Implement a **minimum tax rate of 30%** on capital gains. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- Limit **negative gearing** (deducting losses from residential investments) to **new builds** only; properties held at 7:30pm AEST 12 May 2026 are grandfathered. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- Introduce a **minimum 30% tax rate on discretionary trusts** from 1 July 2028, except where special relief applies (such as rollover relief between 1 July 2027 and 1 July 2030). ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
## Why this matters for your tax planning
These objectives force review of existing investment structures and timeline for transactions:
- **Timing matters**: Disposals made *after* 1 July 2027 of assets acquired before the announcement may use the old 50% discount—but new acquisitions will be subject to new rules. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Property investors** should prioritize **new builds**, especially if planning to negatively gear—established property investing will lose that flexibility from 2027. ✦ For developers, choosing to classify projects as new builds may preserve tax benefits.
- **Trusts** need to assess whether discretionary distributions or income allocations will trigger the 30% minimum rate. Entities may consider restructuring or applying rollover relief.
## Actionable insights & examples
| Scenario | Before reform | After reform opportunity or risk |
|----------|----------------|----------------------------------|
| Alice buys shares in 2027 | 50% CGT discount available | New rate based on inflation + 30% minimum rate—report real gain only |
| Bob negative gears established rental after May 2026 | Full deductions | Once new builds only—Bob’s deductions restricted for new property purchases |
| Trust distributing income arbitrarily | Flexibility with trust distributions | May attract flat minimum rate unless exceptions met |
**Steps you can take now:**
1. Audit your real estate portfolio: Are there opportunities to lock in losses or gains before 1 July 2027?
2. Consult lawyers/accountants about trust distributions—could modernize distribute timing or structure income in future years.
3. If funding new property investment, prioritize new builds or projects commenced after 12 May 2026 to still access negative gearing.
4. Update capital gains forecasts for financial projections under new rules.
## What professionals need to watch
- Real estate agents, finance brokers and portfolio managers will need to clearly disclose when assets were acquired relative to 12 May 2026.
- Tax agents must model CGT under both existing and new rules to advise clients properly.
- Trust administrators should monitor policy on exceptions and rollout relief to determine how to apply the minimum rates.
## Summary
The government’s 2026-27 Budget represents one of the most significant restructurings of investment and trust taxation in decades. To protect after-tax returns, investors and trustees must **plan ahead**, taking action before key dates in mid-2026 and mid-2027. What you do *now* matters more than ever under Australia’s changed tax landscape.