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From discretionary trusts and capital gains tax through to negative gearing and small business concessions, the Government has signaled a major shift in how wealth, investment income and business growth may be taxed in the future.
The key thing to understand?
Many of these measures are still proposals — but they could significantly impact how businesses and investors structure their finances over the next few years.
For business owners, investors and sole traders, this is less about panic and more about preparation.
Here’s a straightforward breakdown of the changes that matter most.
2026 Budget Tax Changes for Businesses and Investors
Small businesses gain more certainty
One of the more positive announcements for SMEs is the proposal to make the $20,000 instant asset write-off permanent from 1 July 2026.
For small businesses, this removes the annual uncertainty around whether the concession will be extended and creates more confidence when investing in:
- Equipment
- Technology
- Vehicles
- Office upgrades
- Machinery
The Budget also proposes a permanent two-year loss of carry-back for companies with turnover up to $1 billion, helping businesses manage cash flow during periods of investment or slower trading conditions.
Additional support has also been proposed for start-ups through refundable losses and expanded Research & Development Tax Incentive measures.
For growing businesses, these changes may create stronger incentives to invest and scale. However, businesses with outdated bookkeeping or limited financial visibility may struggle to maximize the opportunities available.
Discretionary trusts are firmly in focus
One of the most talked-about announcements is the proposed 30% minimum tax on discretionary trusts from 1 July 2028.
The Government says the measure is designed to reduce the tax advantages linked to income splitting through family trust structures.
Under the proposal:
- Trustees would pay a minimum 30% tax
- Beneficiaries would receive non-refundable tax credits
For business owners and investors using discretionary trusts, this could significantly affect future distribution strategies and long-term tax outcomes.
Importantly, expanded rollover relief is proposed from 1 July 2027 for businesses restructuring out of discretionary trusts.
That means the next two years may become a critical planning window for reviewing:
- Trust structures
- Asset ownership
- Distribution strategies
- Succession plans
While further detail is still expected, early planning may create greater flexibility once legislation is finalised.
Capital gains tax reforms could change investment decisions
The proposed capital gains tax reforms are another major shift.
From 1 July 2027, the current 50% CGT discount for individuals, trusts and partnerships is proposed to be replaced with:
- Cost base indexation
- A 30% minimum tax rate on capital gains
The Government’s stated goal is to tax gains above inflation rather than applying a flat discount.
For investors and business owners, this could significantly change future tax outcomes when selling:
- Investment properties
- Shares
- Business assets
- Long-held investments
Transitional rules are expected for assets already owned before 1 July 2027, which may require updated market valuations and stronger record keeping.
For clients planning future asset sales, preparation and documentation could become increasingly important over the next two years.
Negative gearing changes target established properties
The proposed negative gearing reforms are also expected to reshape investment strategies.
From 1 July 2027, negative gearing for residential property investments is proposed to be limited to new builds only.
For established properties purchased after 7.30 pm AEST on 12 May 2026:
- Rental losses would only offset residential property income and capital gains
- Unused losses could be carried forward into future years
Importantly, properties already owned before the announcement are proposed to be grandfathered until sold.
These changes may influence future investor behavior, particularly around:
- New developments
- Long-term property strategies
- Trust ownership decisions
- Portfolio restructuring
For investors with multiple properties or complex ownership structures, strategic planning will become increasingly important.
Relief measures for workers and sole traders
The Budget also introduced several cost-of-living measures.
A proposed $250 Working Australians Tax Offset will apply from the 2027–28 income year, including for sole traders.
Employees will also be able to claim a proposed $1,000 instant deduction for work-related expenses from the 2026–27 income year without keeping receipts.
The Government says these measures are designed to simplify deductions and provide modest tax relief for workers.
Why businesses should start planning now
Although many measures are still proposed only, the direction is becoming increasingly clear: Australia’s tax landscape is changing.
The next two years are likely to become an important planning period for:
- Business restructuring
- Trust reviews
- Capital gains planning
- Investment property decisions
- Asset sales
- Succession planning
Businesses with accurate bookkeeping, reliable reporting and proactive financial support will be far better positioned to respond confidently as more detail emerges.
Final thoughts
The 2026 federal budget tax measures could have significant long-term implications for Australian businesses, investors and business structures.
While there are positive incentives supporting growth and investment, the proposed changes to trusts, capital gains tax and negative gearing may reshape financial planning strategies for years to come.
For business owners and investors, the smartest move right now is simple: get organized early, understand your numbers, and start planning before these reforms move closer to reality.
At iKeep, we help businesses navigate complex bookkeeping, payroll and reporting requirements with greater clarity and confidence, so business owners can make informed decisions as tax and compliance obligations continue to evolve.
