All measures announced on Budget night 12 May 2026 are subject to legislation and may change before becoming law.
The Government has dismantled the three tax pillars that made leveraged residential property the default wealth accumulation vehicle for high-income Australians, and redirected that capital toward new housing supply, companies, and superannuation.
Negative gearing — quarantined for established property
From 1 July 2027, losses on established residential properties acquired after 7:30pm AEST on 12 May 2026 can only offset residential property income, not salary or business income. Excess losses carry forward.
Properties held at announcement are fully grandfathered until sold. New builds remain fully exempt. Commercial property and shares are unaffected.
CGT discount — replaced
From 1 July 2027, the 50% CGT discount is replaced by CPI cost base indexation plus a 30% minimum tax on real gains. Applies to all assets including pre-1985 assets held by individuals, trusts and partnerships.
Gains accrued before 1 July 2027 retain the 50% discount. Only gains arising after that date are subject to the new regime. Assets sold before 1 July 2027 are entirely unaffected.
Clients holding pre-CGT assets should consider whether to crystallise gains before 1 July 2027 while the full exemption remains available.
Discretionary trusts — 30% minimum tax
From 1 July 2028, trustees pay a minimum 30% tax on trust taxable income. Individual beneficiaries receive non-refundable credits. Corporate beneficiaries receive no credit, the bucket company income-splitting strategy is closed for new income.
Three years of CGT rollover relief from 1 July 2027 for restructuring out of discretionary trusts into companies or fixed trusts.
Does not apply to fixed trusts, super funds, deceased estates, special disability trusts, or charitable trusts.
Budget Paper No. 2 confirms the package design explicitly: the property and trust reforms are funding tax cuts for workers. The political architecture is built into the legislation.
The cleanest way to read the whole budget:
The stock of existing wealth is mostly protected. The flow of new capital is being redirected.
The new hierarchy for high-income professionals building wealth needs to be rebuilt.
Loss carry-back for companies — reintroduced from 1 July 2026 for companies under $1 billion turnover. Budget Paper No. 2 frames the rationale as improving "resilience of firms through temporary shocks." Last used during COVID. The language is deliberate.
Permanent $20,000 instant asset write-off — confirmed from 1 July 2026 for businesses under $10 million turnover.
Working Australians Tax Offset — $250 annual offset from 1 July 2027, increasing the effective tax-free threshold for work income by nearly $1,800.
EV FBT — full exemption for EVs under $75,000 continues until 1 April 2029, then reduces to a 25% discount. Arrangements in place before that date are grandfathered.
Dynamic PAYG instalments — opt-in monthly reporting from 1 July 2027 using ATO-embedded software calculations.
Now — document that investment properties were held at 7:30pm 12 May 2026. Consider pre-CGT asset crystallisation before July 2027.
1 July 2026 — loss carry-back commences. Tax rate cut takes effect. Instant asset write-off permanent.
1 July 2027 — CGT and negative gearing changes commence. Rollover relief window opens. Get valuations on significant assets as at this date.
1 July 2028 — trust minimum tax commences.
1 April 2029 — EV FBT full exemption ends.
1 July 2030 — rollover relief window closes permanently.
Nothing urgent. Grandfathering is genuine and generous.
The right response is a structured review: entity structure, CGT positions, trust arrangements, and the rollover relief opportunity, conducted before the relevant deadlines arrive.
The question worth asking is not "how does this affect me tonight?" It is "is my structure still aligned with how capital will be taxed and rewarded over the next decade?"
If you would like to review your position, we are available to help.
General information only. Not financial, tax, or legal advice.
Tommy Li, CA
Director, Verity Advisory | Registered Tax Agent | Authorised Financial Adviser (ASIC Rep No. 1261831) | Member, Chartered Accountants Australia & New Zealand
Tommy is a Chartered Accountant with 20+ years advising medical professionals on tax, financial structure and practice ownership decisions. He founded Verity Advisory to provide integrated advice for doctors at career-defining financial inflection points — combining tax, lending and financial planning into a single structured approach.
EOFY is not just about lodging tax returns. For doctors earning through an ABN, company, or mixed income arrangement, June 30 is the point where tax, super, structure, and deductions all need review. Here are four financial decisions worth getting right before the new financial year starts.
The RBA has hiked again, with a further increase likely before year-end. For doctors navigating property purchases, practice decisions or structural reviews, the implications go beyond the headline rate. Here is what the current environment means for borrowing capacity, practice buy-in timing, and tax structure.
High-earning medical contractors in Australia are often unknowingly trading borrowing capacity for tax savings. Here is why that conflict exists and what integrated advice looks like when both are addressed together.