Federal Budget 2026: What Actually Matters For You

Each year, the Federal Budget lands with a lot of noise.

Headlines, big numbers, political spin… and somewhere underneath it all, a handful of changes that may (or may not) affect your day-to-day life.

I’ve worked through the detail and pulled out what really matters—especially for those approaching or in retirement.

Let’s keep it simple.

First, the Big Picture

There were no major changes to superannuation this year.

That’s important.

Most of the strategies we’ve been working on together remain intact.

Instead, the Budget focused more on:

• tax tweaks
• investment rules
• health and aged care
• cost-of-living measures

​Some are helpful. Some are worth keeping an eye on. A few may shape decisions down the track.

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The Key Changes (in plain English)

💰 1. Small tax cuts and a simpler tax return

• A $1,000 standard deduction for work-related expenses (from 2026/27)
• A small ongoing tax offset (~$250/year) will apply to people earning income from work from 2027/28
• Slight reductions to the lowest tax rate over time

👉 What this means:

• Slightly more cash in your pocket if you're still working
• Tax time becomes a bit simpler for smaller claims
• If you are fully retired, this particular offset wont apply

​Not life-changing—but directionally positive.

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​🏥 2. Health insurance may cost more as you age.
​From April 2027:

• The extra rebate for over-65s is being removed
• Everyone moves onto the same base rebate (income-tested)

👉 What this means:

• If you’re 65+, your premiums may gradually increase
• Worth reviewing whether your cover still suits your needs

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​🚗 3. Electric vehicle tax perks are being wound back
If you’re using (or considering) a novated lease:

• Current generous tax treatment reduces from April 2027
• Higher-priced vehicles lose some of the benefit first

👉 What this means:

• Timing matters if you're considering an EV
• Existing arrangements are generally protected

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​🏡 4. Investment property rules are tightening.
From July 2027:

• Newly purchased existing properties lose full negative gearing benefits
• Losses can only offset rental income or future gains

👉 What this means:

• Existing properties are not affected
• New investments may be less tax-effective

A meaningful shift if property is part of your long-term strategy.

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​📈 5. Capital gains tax (CGT) changes.
Also from July 2027:

• The 50% CGT discount is being removed going forward
• Replaced with an inflation-based calculation method
• A minimum 30% tax rate on gains applies

👉 What this means:

• Future investment gains may be taxed differently
• Long-term planning becomes more important

Importantly:

• Existing gains up to July 2027 are preserved under current rules

For this interested, here is a real world example of how the new CGT rules could work.

• These CGT changes mainly affect investments held in your own name, trusts or partnerships
• Changes do not apply to Superannuation funds (including SMSFs), your main residence (family home) or companies (different tax rules apply)​

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​🧾 6. Family trusts become less flexible
From July 2028:

• Minimum 30% tax applies to trust income

👉 What this means:

• Less flexibility in distributing income across family members
• Some structures may need review over time

There’s a transition window, so this is one to plan for—not react to.

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​👵 7. Aged care support improves (but with changes)
From October 2026:

• More home care packages available
• Personal care becomes fully government-funded

👉 What this means:

• Improved access to care
• Potentially lower out-of-pocket costs for some services

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So....  what should you do?

For most people:

👉 Nothing urgent

​But it is a good time to:

• review how your investments are structured
• think about future tax changes
• make sure your strategy still fits where you're heading

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A quick reality check

Most of these measures:

• are not law yet, and
• may change before they’re implemented

So the goal right now isn’t to react.

It’s simply to:

👉 be aware, and plan ahead where needed
Just as importantly, while a number of these changes relate to tax, it’s worth remembering that:

👉 tax should never be the sole driver of a decision
It’s one factor—alongside your lifestyle goals, cashflow needs, risk tolerance and overall strategy.
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The best outcomes tend to come from getting the broader plan right first, and then making sure it’s structured as efficiently as possible from a tax perspective.

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Final thought

Budgets come and go.

What matters is having a plan that can adapt as things change.
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If anything in here raises a question for you, make a note—we’ll work through it together at your next review.

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IMPORTANT - This article is general in nature and is intended to provide a high-level overview of recent Federal Budget announcements. It doesn’t take into account your personal situation, objectives or needs. If you’re unsure how any of these changes may apply to you, it’s worth getting advice specific to your circumstances before taking action.

This summary draws on the Federal Budget 2026 update prepared by MLC.
You can read the full overview here: