--- title: "Australia's tax reforms are taking shape: what's changed since the Budget?" description: Major Australian tax reforms are progressing. See what the negative gearing, CGT and discretionary trust changes could mean for you. image: https://blog.modoras.com/hubfs/Modoras/Australias%20tax%20reforms%20are%20taking%20shape.png --- [![Modoras](https://blog.modoras.com/hubfs/Modoras%20-%20November2025/images/Modoras_logo.svg "Modoras")](https://blog.modoras.com/insights/www.modoras.com) [![Modoras](https://blog.modoras.com/hubfs/Modoras%20-%20November2025/images/Modoras_sticky_logo.svg "Modoras")](https://blog.modoras.com/insights/www.modoras.com) - [For Business](https://modoras.com/services-business/) - [For Private](https://modoras.com/service-private/) - [About Us](https://modoras.com/about/) - [Our People](https://modoras.com/people/) - [Contact Us](https://modoras.com/contact-us/) - [Sign In](https://blog.modoras.com/insights/client.class.com.au) - [Home](https://modoras.com/) - [Sign In](https://client.class.com.au/) Back ![](https://modoras.zulu.nichestudio.biz/app/uploads/2025/09/logo-white.svg) Bringing decades of expertise in accounting, advisory, audit and wealth management, we unlock potential – fueling financial opportunity to create prosperous futures. We are Accounting *for* Wealth. [Get in touch](https://blog.modoras.com/contact-us/) - [For Business](https://modoras.com/services-business/) - [For Private](https://modoras.com/service-private/) - [About Us](https://modoras.com/about/) - [Our People](https://modoras.com/people/) - [Contact Us](https://modoras.com/contact-us/) - [Change Location](https://modoras.com/) ## Australia's tax reforms are taking shape: what's changed since the Budget? Several major tax reforms announced in the 2026–27 Federal Budget are progressing, with further detail now available on how the changes could affect property investors, business owners and people using discretionary trusts. Some changes won't take effect until 2027 or 2028. However, decisions being made now about property, business structures and future transactions may still be affected. Here's where some of the major reforms currently stand. ## Negative gearing is changing from 1 July 2027 From 1 July 2027, negative gearing for residential property will generally be limited to new builds. Residential properties held before 7:30pm AEST on 12 May 2026 are protected from the changes. For established residential properties acquired after that time, losses will generally no longer be deductible against non-residential income, such as salary and wages, from 1 July 2027. Eligible losses may instead be used against other residential property income, including capital gains, with excess losses carried forward to future years. New residential builds can continue to qualify for negative gearing, subject to the eligibility requirements. ### What this means for property investors The date a property was acquired and whether it qualifies as a new build can make a significant difference under the new rules. Investors considering another residential property should understand how the changes could affect the after-tax cost of that investment. ## Capital Gains Tax is also changing From 1 July 2027, the existing 50% Capital Gains Tax (CGT) discount will be replaced for affected gains by new inflation-based arrangements and a minimum 30% tax rate on real capital gains. The reforms are prospective. Gains accrued before 1 July 2027 remain subject to the existing rules, even where the asset is sold later. For investors who buy eligible new residential builds, the Government has provided a choice between the existing 50% CGT discount and the new arrangements for relevant gains. The eventual tax outcome can depend on factors including the asset, when it was acquired, how long it is held, inflation and the gain realised when it is sold. ## More detail has emerged since the Budget Implementation work since the May Budget has addressed several situations that were not fully covered in the initial announcement. This includes how the property reforms apply in circumstances such as inheritance and relationship breakdown, as well as the treatment of certain trusts and managed investments. The Government has also provided further detail around which properties can qualify as new residential builds. A second tranche of tax reform legislation passed the Senate on 19 August 2026, while consultation on further CGT and negative gearing implementation measures closed on 21 August. Further implementation work is still expected as the reforms move towards their commencement date. ## Discretionary trusts face separate changes From 1 July 2028, the Government plans to introduce a minimum tax rate of 30% for discretionary trusts, with some exceptions. Under the proposed approach, the minimum tax would generally apply at the trustee level. The treatment of beneficiaries and distributions will therefore be an important consideration for affected trusts. For some businesses and families using discretionary trusts, the reforms could affect how income is distributed and how existing structures are used. Expanded rollover relief is also planned for three years from 1 July 2027 to support eligible businesses and others that choose to restructure. ## Small business CGT concessions are staying The four existing small business CGT concessions are set to remain. The turnover threshold associated with the 50% active asset reduction is also increasing from $2 million to $10 million from 1 July 2027. This is an important distinction for business owners. The broader CGT reforms do not remove the existing small business CGT concessions for businesses that continue to meet the eligibility requirements. ### What should you consider now? There may be no need to make immediate changes. However, the period before the reforms commence provides an opportunity to review how they could affect existing plans. - Do you own, or are you considering buying, residential investment property? - Are you considering selling an investment or business asset in the coming years? - Does your business or family group use a discretionary trust? - Are business succession or restructuring plans being considered? - Could your business qualify for the existing small business CGT concessions? The answer will depend on your circumstances, including when assets were acquired and how they are held. ## Planning ahead These reforms have different commencement dates and transitional arrangements. Further implementation detail may also emerge before all measures take effect. For investors and business owners, the focus should be on understanding how the rules interact with decisions you are already considering rather than making changes based on a headline alone. ## What could the tax reforms mean for you? If you own investment property, operate a business through a trust or are considering a significant transaction, speak with your Modoras professional about how the changes could affect your plans. [Contact Modoras](https://modoras.com/contact/) **Sources:** Australian Treasury, 2026–27 tax system changes; Australian Treasury Ministers, tax reform implementation announcements, June–August 2026. This article is published by Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215. This article contains general information only and is not intended to represent specific personal advice (Accounting, taxation, financial or credit). No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional advice before making any financial or business decision. --- #### Contact us ## Get in touch Start the conversation. Arrange a consultation with one of our experts. 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