Tax & Wealth Planning

13 May 2026

2026–27 Federal Budget Analysis: Summary of Impact on High-Net-Worth Individuals (HNW)

The 2026–27 Federal Budget is the most far-reaching reform to Australia’s wealth and investment tax system in nearly three decades: Division 296 extra super tax, removal of the 50% CGT discount, negative gearing limits, and a 30% trust minimum tax combine to materially reshape HNW wealth structures and tax planning.

2026–27 Federal Budget Analysis: Summary of Impact on High-Net-Worth Individuals (HNW)

Key reform summary

  • Division 296 super tax is now law: an extra 15% on balances between $3M and $10M, and an extra 25% above $10M.
  • CGT reform: from 1 July 2027 the 50% discount is removed and CPI indexation of the cost base applies instead. Gains accrued before 1 July 2027 still receive the 50% discount.
  • Negative gearing limits: from 1 July 2027, losses on established dwellings can only be deducted against rental income and future property capital gains. Existing investment properties are unaffected.
  • Discretionary trust: a 30% minimum tax rate, effective 1 July 2028.

The 2026–27 Federal Budget, announced last night by Treasurer Jim Chalmers, is regarded as the most far-reaching reform to Australia's wealth and investment tax system in nearly three decades.

This budget not only reforms Australian superannuation but also reaches the three core wealth tools of high-net-worth individuals:

  • Capital Gains Tax (CGT)
  • Negative Gearing
  • Discretionary Trust (Family Trust)

For HNW clients, the combined effect of the policies below will materially affect wealth structure, investment arrangements and tax planning — so the need for wealth management and tax planning will rise significantly.

Major 2026–27 Federal Budget policy milestones1 Jul 20261 Jul 20271 Jul 2028Division 296 beginsContribution caps raisedCGT 50% discount removedNegative gearing limitsTrust 30% minimumdistribution tax
Major 2026–27 Federal Budget policy milestones

Reform detail and planning directions

1. Superannuation — Division 296's extra 15% becomes law

The government has formally passed the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Act 2026 — one of the most significant tax-structure reforms since Australia's super system was established. It takes effect from 1 July 2026. For the portion of a super balance above $3 million, its

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Further Discussion

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