Tax Planning
Tax Planning Strategies in Australia After the 2026 Budget: What Individuals Should Do Now
New tax policy changes—like replacing the 50% CGT discount and introducing the Working Australians Tax Offset—open planning windows for individuals to act ahead of their effective dates.
By NomadicTax Research Team • 5-8 min read • July 7, 2026
## Key Budget Changes to Know (2026–27 and beyond)
- **Working Australians Tax Offset (WATO):** A permanent annual \$250 offset for eligible workers will take effect with the income earned from work for the **2027–28** income year. It automatically reduces tax liability for those who qualify. ([pm.gov.au](https://www.pm.gov.au/media/tax-reform-workers-businesses-and-future-generations?utm_source=openai))
- **Capital Gains Tax (CGT) Discount Removal + New Minimum Tax:** From **1 July 2027**, the 50% CGT discount for assets held more than 12 months will be replaced with cost-base indexation. A **30% minimum tax** will apply to net capital gains. Existing pre-1985 assets remain exempt, and there's a transitional window for “new builds” where investors can choose between the old and new method. ([grantthornton.com.au](https://www.grantthornton.com.au/insights/federal-budget-2026-27/?utm_source=openai))
- **Negative Gearing Reforms:** Established residential properties acquired **after 7:30 pm AEST on 12 May 2026** will be subject to rules restricting deductions. Losses can only be offset against rental income or capital gains and any excess carried forward. Pre-existing investments and contracts will maintain full negative gearing benefits until 30 June 2027. ([grantthornton.com.au](https://www.grantthornton.com.au/insights/federal-budget-2026-27/?utm_source=openai))
## Planning Actions You Can Take Now
| Timing | Strategy | Why It Matters |
|--------|----------|-----------------|
| By 30 June 2026 | Finalise investment decisions for residential property or asset purchases. Under ‘new builds’ rules, you may lock in current negative gearing benefits. | After the cut-off, established properties lose full deductibility. ([grantthornton.com.au](https://www.grantthornton.com.au/insights/federal-budget-2026-27/?utm_source=openai)) |
| Before 1 July 2027 | Consider realising capital gains under the current 50% discount, especially if gains are large and you expect lower marginal tax rates. | Once new CGT rules apply, gains will face stronger tax bite. |
| From 1 July 2027 | New CGT method using cost-base indexation with 30% minimum tax. For new residential builds, evaluate which option provides greater tax benefit. | Investors in new builds get a choice between old and new regimes. |
## Example Scenarios
- **Investor A** purchased an established rental property in 2019. If they wait until after the threshold date to sell, they lose full negative gearing deductions. Selling before the transition may retain full benefit.
- **Investor B** holds shares that have significantly appreciated. If those shares are sold before 1 July 2027, they benefit from 50% CGT discount. After that date, they’ll face the new minimum rate—so earlier gains lock in savings.
## Bottom Line & Action Items
1. **Review your property portfolio**—if you’re planning property investment, make decisions now.
2. **Estimate potential capital gains sooner** to use existing discounts.
3. **For new residential property investments**, model options under both regimes (discount vs. indexation).
4. **Get professional advice**, particularly for high balance super funds, property developers, or investors with diversified portfolios.
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*Author: NomadicTax Research Team*
Category: Tax Planning
Read Time: 5–8 min