This article was written by Nancy Wang Principal Solicitor at W & G Lawyers.
A W & G Lawyers client briefing Updated 29 June 2026
The 2026–27 Federal Budget and a busy final sitting fortnight have delivered one of the most significant clusters of tax, superannuation and workplace changes in years. Some are already law and take effect this July. Others have passed Parliament but won’t bite until 2027. And one of the most talked-about measures — the minimum tax on family trusts — isn’t law at all yet.
Below is where each change actually stands, and who it affects.
At a glance
| Measure | Status | Takes effect |
| Negative gearing restriction (established residential property) | Law | 1 July 2027 |
| CGT — 50% discount replaced with indexation + 30% minimum tax | Law | 1 July 2027 |
| 30% minimum tax on discretionary trusts | Not yet law (announced) | Proposed 1 July 2028 |
| SMSF residential property borrowing ban (LRBAs) | Law | ~45 days after Royal Assent (~mid-August 2026) |
| Division 296 — extra tax on super balances over $3m | Law | 1 July 2026 |
| Payday super | Law | 1 July 2026 |
| Minimum and award wage increase | In effect | First full pay period on/after 1 July 2026 |
In short: three measures start this July, two more are law but don’t begin until July 2027, the SMSF borrowing ban commences within weeks, and the trust tax is still only a proposal.
01 — Negative gearing on established residential property
Status: Law · Takes effect 1 July 2027
Passed as part of the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, this measure changes how losses on established residential investment property are treated. From 1 July 2027, investors who acquire established residential property after 7:30pm (AEST) on 12 May 2026 will no longer be able to deduct net rental losses against salary or other non-rental income. Those losses can still be offset against residential rental income or future capital gains on residential property, and any unused losses carry forward to later years.
Properties held at Budget night — including those under contract awaiting settlement — are grandfathered under the current rules until they are sold. Eligible new builds are exempt and retain access to negative gearing.
Who it affects: leveraged investors buying established residential stock after Budget night.
02 — The capital gains tax discount
Status: Law · Takes effect 1 July 2027
The 50% CGT discount for individuals, trusts and partnerships is being replaced with cost base indexation plus a minimum 30% tax on net capital gains, for gains accruing from 1 July 2027. This reaches across all CGT assets — not just property, but shares and other investments too. The main residence exemption is untouched, and superannuation funds keep their existing treatment. Investors in eligible new build residential property can choose between the existing 50% discount and the new arrangements. Gains that accrued before 1 July 2027 are protected.
Who it affects: anyone holding long-term CGT assets outside super.
03 — Minimum tax on discretionary trusts
Status: Not yet law · Proposed start 1 July 2028
This is the measure most often misunderstood as already in force. It is not. Announced in the 2026–27 Federal Budget on 12 May 2026, the proposal would impose a 30% minimum tax on income distributed from discretionary (family) trusts. It remains before Parliament and, if enacted, is slated to begin 1 July 2028.
Following significant backlash, the Government signalled several carve-outs. Discretionary testamentary trusts (those created under a Will) would be permanently exempt, preserving the ability to distribute to minor or low-income beneficiaries at ordinary marginal rates. Fixed unit trusts, widely held trusts, charitable trusts and primary production (farming) income would also sit outside the 30% floor. A proposed three-year CGT rollover window (1 July 2027 – 30 June 2030) would let eligible trusts restructure into a company or unit trust without triggering an upfront capital gains liability.
Critically, your trust distribution strategies for the 2025–26 and 2026–27 financial years are completely unaffected. There is no need to dismantle a family trust now — but with a long lead time and a defined restructure window, it is worth reviewing whether a future move to a company or unit trust will suit your circumstances before 2028.
The detail here was still being negotiated through June 2026; the exact scope of exemptions should be confirmed against the final legislation once it is introduced.
Who it affects: families operating active discretionary trusts.
04 — SMSF residential property borrowing ban
Status: Law · Commences ~45 days after Royal Assent (~mid-August 2026)
A late amendment to the tax package bans self-managed super funds from entering new limited recourse borrowing arrangements (LRBAs) to acquire residential property. The ban begins 45 days after the legislation receives Royal Assent, expected around mid-August 2026.
Existing LRBAs are fully grandfathered, and contracts exchanged before the commencement date are protected even if settlement occurs afterwards. Borrowing for commercial or business real property is unaffected, and an SMSF can still acquire residential property outright where it has the funds — the change targets borrowing, not ownership.
A practical warning: when a similar policy was floated in 2019, lenders withdrew SMSF residential loan products before any law passed. If you are mid-process, the product you need may disappear before the legal deadline.
Who it affects: trustees planning a geared residential purchase inside super.
05 — Division 296: extra tax on large super balances
Status: Law · Takes effect 1 July 2026
From 1 July 2026, an additional tax applies to earnings attributable to the portion of an individual’s total superannuation balance above $3 million — an extra 15%, rising to an extra 25% on the portion above $10 million. Two points distinguish the final law from the original 2023 proposal: it taxes realised earnings only, not unrealised gains, and both thresholds are indexed over time.
For the first year (2026–27), the liability is assessed solely on your total super balance at 30 June 2027, which leaves a window to review your position before year-end. SMSFs can opt in to a one-off cost base reset to market value at 30 June 2026, so that gains built up before the tax started are excluded from future Division 296 calculations.
Who it affects: members with super balances near or above $3 million.
06 — Payday super
Status: Law · Takes effect 1 July 2026
From 1 July 2026, employers must pay super at the same time as wages rather than quarterly, with contributions reaching the employee’s fund within seven business days of each payday. Late contributions attract the superannuation guarantee charge, which is not tax-deductible. Payroll software, cash flow planning and clearing house arrangements all need to be ready before the first pay run of the new financial year.
Who it affects: every employer; employees benefit from earlier and more visible super contributions.
07 — Minimum and award wage increase
Status: In effect · First full pay period on or after 1 July 2026
The Fair Work Commission’s 2026 Annual Wage Review lifted modern award minimum rates by 4.75% and raised the National Minimum Wage to $26.44 per hour ($1,004.90 per week, based on a 38-hour week). The increase applies from the first full pay period starting on or after 1 July 2026, benefiting around 2.8 million award-covered employees. Employers should confirm classification rates and check that any all-inclusive salary arrangements still clear the new floor, including overtime, penalties and allowances.
Who it affects: award-covered employees and their employers.
Where to from here
The measures already in force — Division 296, payday super and the wage increase — require action now, particularly for employers and members with large super balances. The negative gearing and CGT changes are settled law but give until July 2027 to plan. The SMSF borrowing ban demands prompt attention only if you are mid-purchase. And the trust tax, while not yet law, is worth getting ahead of given its long restructure window.
If any of these affect your property, business, super or estate planning, we can help you review your position and act within the windows that matter.
Contact W & G Lawyers to speak with our property and estate planning team.
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Disclaimer
This article is general information only and does not constitute legal advice under Australian law. For advice specific to your situation, please contact W & G Lawyers. For further details, please click here to view our disclaimer.