2026–27 Budget

2026–27 Australian Federal Budget

handed down on May 12, 2026, focuses on sweeping tax reform, housing affordability, and sovereign resilience, while keeping a tighter rein on cost-of-living payouts to ease inflationary pressures.

Housing & Tax Reforms
Capital Gains Tax (CGT):
The long-standing CGT discount is abolished for investments held for more than 12 months, except for investments in new residential dwellings.

Negative Gearing
Limited to investors purchasing newly built homes, phasing out the tax break for pre-existing residential investments.

Trusts
Tax-efficient streaming of discretionary trust distributions is eliminated, with distributions now subject to a minimum 30% tax rate.

Working Australians Tax Offset
A new one-off Working Australians Tax Offset (WATO) will deliver up to $250 for each Australian worker in 2027–28.

Defence & Sovereign Resilience
Defence Spending
An additional $53 billion is locked in over the next decade—including a $14 billion injection over the next four years—primarily to fund the AUKUS submarine program, drones, and long-range strike capabilities.

Fuel Security
A $7.5 billion Fuel and Fertiliser Security Facility and a $3.2 billion Australian Fuel Security Reserve have been introduced to boost national supply resilience

Business & Economy
Instant Asset Write-Off
The $20,000 instant asset write-off scheme has been made permanent for small to medium businesses.

Economic Forecasts
Deficits remain stable with an underlying cash deficit projected at $31.5 billion for 2026–27. Gross debt is projected to surpass $1 trillion.

Corporate & Resources
The petroleum resource rent tax (PRRT) is revised upward, drawing an extra $400 million from the sector.

Social Services & Health
NDIS Reforms
Tighter guidance and standardized eligibility assessments have been introduced to slow the explosive cost growth of the NDIS, aiming to save roughly (\$15) billion.

Healthcare
An additional (\$25) billion over five years has been dedicated to public hospitals, along with making Medicare Urgent Care Clinics permanent.

Aged Care
Over $600 million is allocated over four years to expand Support at Home packages and deliver more residential aged care beds.

Immigration & Employment
Migration Cap: The permanent migration planning level is maintained at 185,000 places, with a heavy prioritization on onshore applicants (129,590 places) to relieve pressure on the housing market.

Features Explaining the Budget

budget.gov.au-cost-of-living

ourstatebudget.wa.gov.au