At-a-Glance Summary
- •15% bracket replaces 16% on $18,201–$45,000 from 1 July 2026 (saves up to $268)
- •Working Australians Tax Offset (WATO) up to $250 for 13M workers from 1 July 2026
- •$1,000 instant work-expense deduction from 2026-27 — no receipts needed
- •CGT 50% discount replaced by cost base indexation + 30% minimum tax (from 1 July 2027)
- •Negative gearing limited to new builds (from 1 July 2027, existing investments grandfathered)
- •Division 296 — extra 15% tax on super earnings over $3M balance (from 1 July 2026, now law)
- •Discretionary trusts face a 30% minimum tax (from 1 July 2028)
- •Super Guarantee rises to 12% from 1 July 2026 (already legislated)
In This Guide
Timeline: When does each change start?
| Start Date | Change | Status |
|---|---|---|
| 1 Jul 2026 | 15% bracket on $18,201–$45,000 | Announced |
| 1 Jul 2026 | Working Australians Tax Offset (up to $250) | Announced |
| 1 Jul 2026 | Super Guarantee rises to 12% | Law |
| 1 Jul 2026 | Division 296: extra 15% on super earnings over $3M | Law (Mar 2026) |
| 2026-27 | $1,000 instant work-related deduction | Announced |
| 1 Jul 2027 | CGT 50% discount → indexation + 30% min tax | Announced |
| 1 Jul 2027 | Negative gearing limited to new builds | Announced |
| 1 Jul 2028 | 30% minimum tax on discretionary trusts | Announced |
What "Announced" means: The change was confirmed in the Budget speech and Budget papers but still requires legislation. Existing arrangements are grandfathered for CGT and negative gearing if the asset was acquired before 7:30pm AEST on 12 May 2026.
Changes for workers
→ New 15% tax bracket from 1 July 2026
The second bracket drops from 16% to 15% on income between $18,201 and $45,000. Anyone earning $45,000 or more gets the full $268 saving each year. Combine this with WATO and total benefit can reach ~$518.
Read the full guide →
→ Working Australians Tax Offset (WATO)
A new non-refundable offset worth up to $250, benefiting over 13 million working Australians. Applied automatically when you lodge your tax return.
Read the full guide →
→ $1,000 instant work-related deduction
From 2026-27, you can claim a flat $1,000 work-related expense deduction without receipts. Around 6.2 million workers will benefit by an average of $205. You can still itemise if your actual expenses are higher.
Read the full guide →
Changes for property investors
→ CGT 50% discount replaced from 1 July 2027
The 30-year-old 50% capital gains tax discount is being phased out. Replaced by cost base indexation plus a minimum 30% tax rate on net realised gains. Only applies to gains accruing after 1 July 2027.
Read the full guide → or use the CGT calculator
→ Negative gearing limited to new builds
From 1 July 2027, you can only deduct rental losses against other income if the property is a new build. Existing investments (acquired before 7:30pm AEST 12 May 2026) are grandfathered.
Read the full guide →
Changes for superannuation
→ Division 296: extra 15% tax on super over $3M
Passed Parliament on 10 March 2026. From 1 July 2026, an additional 15% tax applies to the proportion of super earnings attributable to balances above $3 million — taking the effective rate from 15% to 30% on that portion. Higher rates apply over $10 million.
Read the full guide →
Super Guarantee rises to 12%
From 1 July 2026, employer Super Guarantee contributions rise from 11.5% to 12% — the final step in the legislated phased increase. Use our super calculator to see what this adds to your retirement.
Changes for small business and trusts
Permanent $20,000 instant asset write-off
From 1 July 2026, small businesses with turnover up to $10 million can immediately deduct eligible assets costing under $20,000. This was previously extended year-by-year — now permanent.
Loss carryback for small companies
From 2026-27, eligible companies that make a loss can use it to claim a refund against tax paid in the previous two income years. Around 85,000 mostly small companies are expected to benefit.
30% minimum tax on discretionary trusts
From 1 July 2028, a 30% minimum tax will apply to the taxable income of discretionary trusts (often called family trusts). This closes a long-standing planning gap where distributions could attract lower marginal rates.
Calculators to estimate your impact
2026-27 vs 2025-26 Tax Comparison →
Type your salary, see exactly how much you save under the new 15% bracket.
CGT Old-vs-New Calculator →
Compare the current 50% discount vs the new indexation + 30% minimum rules.
Salary Calculator →
See your full take-home pay across financial years from 2020-21 to 2026-27.
Super Calculator →
See the impact of the 12% Super Guarantee on your contributions.
Frequently Asked Questions
When were the Budget 2026 tax changes announced?
The 2026-27 Federal Budget was delivered by Treasurer Jim Chalmers on 12 May 2026. It is widely described as the most significant tax reform package in more than 25 years.
Which changes take effect from 1 July 2026?
From 1 July 2026, the second tax bracket drops from 16% to 15% (applies to income between $18,201 and $45,000), the Working Australians Tax Offset (up to $250) begins, the Superannuation Guarantee rises to 12%, and Division 296 (the additional 15% tax on super earnings on balances over $3 million) commences.
Which changes do not start until 2027 or later?
The replacement of the 50% CGT discount with cost base indexation plus a 30% minimum tax, and the negative gearing restriction to new builds only, both start from 1 July 2027. The 30% minimum tax on discretionary trusts starts from 1 July 2028.
Is the $1,000 instant deduction available now?
The $1,000 instant work-related expense deduction applies from the 2026-27 income year. You can claim it on the tax return you lodge for the year ending 30 June 2027.
Are the CGT and negative gearing changes law yet?
No. They were announced in the Budget on 12 May 2026 but require legislation to pass Parliament. The Government has confirmed that arrangements remain unchanged for all existing investments made before 7:30pm AEST on 12 May 2026.
How much will the average worker save under the new 15% bracket?
A worker earning $45,000 or more saves $268 per year from the 16%-to-15% rate cut on the $18,201-$45,000 bracket. Lower-income workers save proportionally less. Up to 13 million workers also benefit from the Working Australians Tax Offset of up to $250 per year.
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This guide summarises the 2026-27 Federal Budget tax announcements. Most measures require legislation to take effect and final rules may differ. This is general information, not financial or tax advice. Consult a registered tax agent for advice on your circumstances.
Last updated: 25 May 2026