It’s Monday morning. You just stepped into the work kitchen to make a much needed coffee… someone’s complaining about tax again… aaaaand you feel totally out of the loop.

It’s not the sexiest of topics… but tax reform affects us all. Here’s everything you need to know to feel a part of the conversation.

A quick refresh:

2026 Federal Budget

In May, the government announced a bunch of tax reforms aimed at closing the generational wealth gap (you can read all about it here and here).‍

The two biggest changes were around winding back the capital gain tax discount and  negative gearing on properties purchased.

BUT… a few things have changed since the budget was announced.

Firstly, those proposed changes have now actually passed through parliament and have become law.

So, what’s changed as of July 1st this year?

You can get an instant $1,000 deduction for work-related expenses. And you won’t need receipts! If you’ve spent more than $1,000, you can still claim your expenses the old-fashioned way - with receipts.

This replaces the previous $300 receipt-free limit and covers expenses from this new financial year (2026–27).

This doesn't apply to the tax return you're lodging right now (that's for 2025–26). You'll claim it for the first time in the return you lodge from July 2027.

What’s changing from July 1st 2027?

This is when the big two kick in… (the ones getting the most air time).

Capital Gains Tax

The 50% capital gains tax discount is being replaced by a cost-based indexation (so only inflation-adjusted gains are taxed)... and a minimum 30% tax rate.

Worth noting that gains made before 1 July 2027 will still get the 50% discount (even if you sell later).

This is all still the same as what was announced in the budget.

What’s changed?

The government backflipped after facing backlash from small businesses. So now, small businesses turning over less than $10 million a year (up from the old $2 million cap) can still access the 50% capital gains concession when they sell eligible business assets (like the business itself).

And the government’s still looking into a carve-out for startup founders, employees who receive shares, and early investors. But nothing’s been made official yet… so watch this space.

Negative Gearing

Negative gearing has been wound back for established properties purchased after 7:30pm on the 12th of May 2026.

Bought before then? Your property is 'grandfathered', meaning nothing changes for you. And new builds and some government housing programs will still be eligible for negative gearing.

One thing that’s been tripping the government up is how to stop grandfathered properties losing that status if an owner dies or a couple divorces. That’s meant to be looked at again in the next round of legislation.

Income Tax

From July 2027, working Aussies will automatically qualify for the Working Australian Tax Offset of up to $250 a year. This effectively lifts the tax-free threshold on income from work to $19,985. So, most workers earning under that won't pay income tax on it.

What does this all mean for you?

Investor?
From July 2027, gains on your shares or crypto won't get the 50% discount anymore… BUT gains you've already made before 1 July 2027 keep the discount (even if you sell later).

Small business owner?

If your business turns over under $10 million a year, you've dodged a bit of a bullet. You can still access the 50% small business CGT concession on eligible business assets (your personal investments outside the business are a different story).

Investment property owner?
If you bought before the 12th of May 2026, you're grandfathered, so nothing changes. But if you bought an established property after that, from July 2027 your rental losses can only be offset against other residential property income, not your salary (new builds are still exempt).

Worker?
You can claim an instant receipt-free deduction of up to $1,000 for this financial year's (2026–27) work expenses - you'll claim it in the return you lodge from July 2027, not the one you're doing now.

And from July 2027, the tax offset of up to $250 means most workers won't pay income tax on work income under $19,985.

It’s a lot to keep on top of (we get it)... but keeping across tax changes means you can make more informed choices when it comes to your money and what you do with it.

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