Tax Planning
How the 2026-27 Federal Budget is Changing Capital Gains, Negative Gearing, and Trust Taxation
Big shifts in 2027 reshaping how investors, property owners and trust beneficiaries will pay tax—understand how reforms to CGT, negative gearing, and trusts affect real-world planning.
By NomadicTax Research Team • 5-8 min read • August 7, 2026
## What Are the Major Reforms Coming?
From **1 July 2027**, Australia introduces significant changes in taxation for property investment, trusts, and the treatment of capital gains and losses. These were announced in the Budget 2026-27 package. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- The **50% CGT discount** is being removed and replaced with a **discount for inflation**, with a **minimum tax rate of 30% on capital gains**. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Negative gearing** for residential properties will be **limited to new builds only**. Properties held before Budget announcement (7:30 pm AEST, 12 May 2026) are exempt. Existing investors can carry forward losses but only apply them against specific income types. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- Introduction of **30% minimum tax rate on discretionary trusts** from **1 July 2028**, with limited exceptions. Reforms include rollover relief for restructuring from 1 July 2027. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
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## Implications for Investors and Property Owners
- **CGT changes**: If you sell an asset after 1 July 2027, CGT will be calculated after indexing the cost base for inflation. The discount may still be available for **new builds** per your election. Assets held prior then are exempt. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Negative gearing limits** mean that only new residential properties qualify from 2027-28. Losses on established properties will have restricted deductibility. Exemptions apply for pre-announcement purchases. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **Trusts**: Discretionary trusts face a flat minimum rate of 30% unless exceptions apply. Rollover relief allows restructuring to avoid harsh consequences by 1 July 2027. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
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## Real Strategy Adjustments
- Consider timing asset sales before 1 July 2027 where possible, to benefit from current CGT rates.
- For property investors: acquiring new builds may gain favorable treatment under the new negative gearing rule.
- Trusts: If you operate a discretionary trust, explore whether restructuring or changes in beneficiary allocations before July 2028 could reduce tax exposure.
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## Key Dates to Know
- **12 May 2026, 7:30 pm AEST**: Announcement time—holding date for negative gearing and CGT exemptions. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **1 July 2027**: CGT & negative gearing reforms effective. Minimum tax rate on capital gains begins. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
- **1 July 2028**: Minimum tax on discretionary trusts applies. Rollovers relief available in preceding period. ([treasury.gov.au](https://treasury.gov.au/policy-topics/taxation/budget2026-27?utm_source=openai))
These major budget reforms require careful planning—whether you're a property owner, investor, or trust beneficiary. Moving proactively can preserve tax benefits and optimise outcomes.