Federal Budget 2026-27 Update: What You Need to Know Now

The 2026-27 Federal Budget introduced several significant proposed tax changes that will impact investors, property owners and family wealth structures over time.

If you would like to revisit our initial overview of these proposed changes, you can access it here.

Importantly, these measures are not yet law. They are still progressing through Parliament and are likely to change before being finalised.

At this stage, the key message is simple: don’t act immediately; decisions should be made only after seeking specialist advice, once the final legislation is confirmed.

Where Things Stand Today- 11 June 2026

The proposed reforms have moved into the parliamentary process.

While the Government has passed the legislation through the House of Representatives, it is now being considered in the Senate, where amendments are expected.

As is often the case with large-scale tax reform, the initial announcements are high-level, with key details still being fine-tuned and worked through during the parliamentary process. This creates a period of uncertainty for taxpayers and advisers.

Because of this, personalised advice is key.

It is important to understand both your current position and your likely future position once the legislation is finalised, including how the detailed rules ultimately apply to your specific circumstances.

At this stage, it is expected that:

• Some measures will pass
• Some will be amended
• Some may be delayed
• Others may be narrowed in scope

Key Proposed Changes

Capital Gains Tax (CGT) Reform

• Proposed removal of the 50% CGT discount from 1 July 2027
• Replacement with a new system linked to inflation and minimum tax rates
• Currently under Senate review and expected to be amended

Negative Gearing (Residential Property)

• Proposed limits on using residential property losses against other income
• Applies to new purchases after the start date
• Expected to pass, however, may be modified or delayed through Senate negotiations

Discretionary Trust Taxation

• Proposed that discretionary trusts will pay a minimum tax rate of 30% before distributions are made to beneficiaries.
• Likely to affect income distribution strategies within family groups
• Still under consultation with significant design details to be confirmed

What This Means

While these federal budget proposals may eventually lead to significant tax changes for individuals and business owners, it is important not to act prematurely.

At this stage:

• The legislation is still evolving
• Key details remain uncertain
• Early decisions could create unintended consequences

The appropriate approach is to stay informed, maintain flexibility and seek advice before making any changes.

Our key message to you

These reforms represent a significant shift in policy direction; they are still working through Parliament and are subject to change.

As is often the case with large-scale tax reform, the initial announcements are high-level, with key design details still being refined through the parliamentary process. This creates a period of uncertainty for taxpayers and advisers.

The key message at this stage is simple:

Do not make decisions based on announcements alone. Speak with your Morrows adviser before taking any action so we can assess your full position and ensure any strategy is appropriate once the final legislation is confirmed.

We will continue to monitor developments closely and provide updates as further details become available.

For tailored advice, please contact your Morrows adviser.