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The Reserve Bank of Australia announced its latest monetary policy decision following the May board meeting, increasing the official cash rate by 0.25 percentage points to 4.35%.
Cash Rate Decision
This marks the third rate increase in 2026, reflecting continued concern from the central bank about persistent inflation and strong household spending.
Key Comments from the RBA
In its statement, the RBA highlighted several factors behind the decision:
The RBA indicated that future decisions will depend on incoming data, particularly inflation, employment, and household spending trends.
The latest rate rise will affect households, businesses and investors across Australia.
Cost of Living Implications
Higher interest rates are designed to slow spending and reduce inflation. However, in the short term many households may continue to face pressure from:
For families and young professionals, this can mean less disposable income and tighter household budgets.
Borrowing Impact
As interest rates rise:
This may slow property purchases and business investment in the near term.
Economic Outlook
Despite the rate rise, Australia’s economy remains relatively resilient with:
However, higher rates could lead to slower economic growth in late 2026 as consumer spending eases.
Mortgage holders will likely feel the impact quickly, as lenders typically pass on RBA rate increases to variable home loans.
Repayment Example
If lenders pass on the full 0.25% increase:
For households already dealing with rising living costs, even small increases can add up.
Rate Pass-Through from Banks
Major lenders often respond within days of an RBA decision. Borrowers should watch for announcements from banks and lenders regarding:
Refinance Opportunities
With rates rising, reviewing your home loan may be worthwhile. Borrowers could potentially:
A regular mortgage review can help ensure your loan remains competitive.
Interest rate changes influence both the property market and broader investment strategies.
Property Market Implications
Higher interest rates can:
For property investors, this may create both risks and opportunities, depending on location and rental yield.
Share Market Impact
Interest rates also influence the share market:
Investors may consider reviewing their portfolios to ensure they remain aligned with their long-term financial goals.
The next monetary policy decision from the Reserve Bank of Australia is scheduled for mid-June 2026 following the next board meeting.
Markets and economists will be closely watching:
These indicators will help determine whether rates rise further, pause, or begin to stabilise later in the year.
At 360 Financial Strategists, we help Australians navigate interest rate changes with confidence. Whether you’re reviewing your mortgage, building wealth, or planning for retirement, our advisers can help you develop a clear financial strategy.
Book a consultation with our team today
Will interest rates go down in 2026?
Interest rate movements depend on inflation, employment data, and economic growth. The RBA reviews these indicators regularly before making decisions.
How often does the RBA change interest rates?
The RBA board meets monthly (except January) to review monetary policy.
Should I fix my mortgage rate now?
This depends on your financial situation, risk tolerance, and long‑term plans. A mortgage adviser can help evaluate the pros and cons.
Reserve Bank of Australia – Monetary Policy Decision (5 May 2026)
https://www.rba.gov.au/media-releases/2026/mr-26-12.html
If you’re running a business, chances are you’ve heard about the instant asset write-off — and probably wondered if it’s still worth using, how it works now, and whether you’re missing out.
The short answer? It can be a powerful tool for managing cash flow and reducing your tax bill — but only if you understand how and when to use it properly.
This article breaks it down in plain English so you can make informed decisions, not rushed ones at the end of financial year.
The instant asset write-off allows eligible Australian businesses to claim an immediate tax deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use.
Instead of depreciating the asset over several years, you claim the full amount upfront (subject to thresholds).
Think of it as bringing forward your tax deductions, which can improve short-term cash flow.
The rules around the instant asset write-off have changed multiple times over the past few years — which is where most of the confusion comes from.
As at the current settings (subject to legislation updates):
This follows changes from previous years, including 2023,2024 and 2025. These frequent updates are why it’s important not to rely on last year’s rules when making decisions.
At its core, it’s simple — but the detail matters.
You Purchase an Eligible Asset
This could include:
It’s not enough to order or pay for the asset — it must be ready for use in your business before the deadline.
If the asset cost is under the threshold, you can claim the full business-use portion as a deduction in your tax return.
If you use the asset partly for personal use, you can only claim the business portion.
Generally, the scheme applies to:
If you’re unsure whether you qualify, this is where a conversation matters, eligibility isn’t always as straightforward as it seems.
Most tangible depreciating assets used in your business can qualify, including:
What doesn’t qualify:
This is where strategy comes in.
By claiming deductions upfront, you may reduce your taxable income — meaning less tax payable in the short term.
It can support decisions to upgrade equipment, improve efficiency, or expand operations.
If you were already planning to invest in assets, timing the purchase correctly can make a real difference.
Up-to-date equipment and systems can improve productivity and customer experience.
The instant asset write-off sounds simple — but there are a few common traps.
It’s Not “Free Money” – You’re not getting a discount, you’re bringing forward a deduction. The cash still leaves your business.
Timing Is Everything – If the asset isn’t ready for use before 30 June, you miss the deduction for that year.
It Shouldn’t Drive Bad Decisions – Buying something just to “save tax” often doesn’t stack up financially.
Cash Flow Still Matters – Even if you reduce tax, you still need to fund the purchase upfront.
If you’re considering using the instant asset write-off in 2026 but want to make sure it actually makes sense for your business, a quick conversation can help.
A Free Business Advice Clarity Call with the team at 360 Financial Strategists gives you a chance to talk through your options, understand the impact, and decide what’s right for you — without pressure. Sometimes it’s just about having the right conversation to make the next move clearer.
It allows eligible businesses to immediately deduct the cost of eligible assets used in their business, rather than depreciating them over time.
Currently set at $20,000 per asset for eligible small businesses, but always check for updates as thresholds change.
Yes — the threshold applies per asset, not per year.
No — financed assets may still qualify, depending on structure and use.
You’ll need to depreciate the asset over time instead of claiming it upfront.
Working from home (WFH) is no longer a temporary shift—it’s a normal part of how many Australians work. With that shift, the way you claim home office expenses on your tax return has evolved. The home office rate, set by the Australian Taxation Office, is the method many people use to calculate deductions for the costs of working from home.
In simple terms, the home office rate is part of the fixed rate method, which allows you to claim a set amount per hour worked from home to cover running expenses. These expenses typically include electricity, internet, mobile or phone usage, and basic office consumables like stationery. It’s designed to simplify the process so you don’t need to calculate every individual cost separately.
However, the system hasn’t stayed the same. Prior to recent changes, many Australians used the well-known 80 cents per hour shortcut method, which bundled nearly all home office expenses into one simple rate with minimal record-keeping. While convenient, it didn’t always accurately reflect actual costs—especially for people working from home long-term.
From 2023 onwards, the ATO removed the shortcut method and refined the fixed rate method. This means:
These changes aim to strike a balance between simplicity and accuracy. While the process is still relatively straightforward, it does require a bit more diligence than in previous years.
For many households, this has meant rethinking how they track their work patterns and expenses. It’s no longer enough to estimate—documentation matters. That said, the fixed rate method remains a practical option for most employees and small business owners who work from home regularly.
Claiming a work-from-home tax deduction comes down to choosing the right method and maintaining the right records. The two main options are the fixed rate method and the actual cost method.
The fixed rate method is the most commonly used because it simplifies the process. You multiply the number of hours worked from home by the ATO’s set hourly rate. This rate is intended to cover common running expenses, which means you don’t need to calculate each one individually.
To make a valid claim under the fixed rate method, you’ll need:
It’s important to understand what the fixed rate method does and does not include.
| Includes | Doesn’t include |
Electricity and gas for heating, cooling, and lighting Internet and phone usage Stationery and small consumables | Office furniture (such as desks and chairs) Computers, monitors, and other equipment Repairs or depreciation of assets These items can often still be claimed, but they must be calculated separately using different tax rules |
The alternative is the actual cost method, which requires you to calculate the exact work-related portion of each expense. This method can potentially result in a larger deduction, but it is more complex and requires detailed records. For most people, the fixed rate method strikes a good balance between ease and accuracy.
While claiming WFH expenses can reduce your taxable income, it’s important to approach it carefully. The ATO has increased its focus on compliance in this area, and incorrect claims can lead to adjustments or penalties.
Here are some key considerations:
One of the most common misconceptions is that you can claim a standard amount without any documentation. Under current rules, this is not the case. Even when using the fixed rate method, you still need to show how many hours you worked and that you incurred the relevant expenses.
Another important factor is consistency. If your working from home arrangement changes throughout the year—such as hybrid work or varying hours—you’ll need to reflect that accurately in your records.
For business owners and self-employed individuals, the rules can be slightly different, particularly when it comes to occupancy expenses like rent or mortgage interest. These claims can have broader implications, including potential capital gains tax impacts, so it’s worth seeking professional advice before proceeding.
The removal of the 80 cents per hour shortcut method marked a significant change in how Australians approach WFH deductions. While it was easy to use, it often oversimplified real costs and didn’t encourage accurate record-keeping.
The updated fixed rate method introduces more accountability. Instead of relying on a blanket rate with minimal evidence, taxpayers now need to demonstrate both their work-from-home hours and the expenses they’re claiming.
This shift reflects a broader trend in tax administration—moving towards greater transparency and accuracy. While it may feel like more work initially, it also creates a fairer system where deductions more closely reflect actual costs. In 2024-2025 the ATO updated its policy and went to a 70 cent per work hour fixed rate.
Staying on top of your WFH claims doesn’t need to be complicated. A few simple habits can make the process much easier at tax time:
The key is consistency. Small, regular updates are far easier than trying to reconstruct an entire year’s worth of information at the last minute.
While WFH deductions can provide some tax relief, they are just one part of your overall financial picture. Understanding how they fit into your broader strategy—such as cash flow, tax planning, and wealth creation—can help you make more informed decisions.
For example, choosing between the fixed rate and actual cost methods isn’t just about convenience. It can affect your taxable income, your record-keeping obligations, and even your long-term financial planning.
This is where having a clear strategy matters, even if you are a smaller size business or a consultant. Rather than treating tax deductions as a once-a-year exercise, integrating them into your overall financial plan can lead to better outcomes over time.
If you’re unsure how to approach this, it may be worth speaking with a professional. The ASIC provides general guidance on financial decision-making, but personalised advice can help you apply these rules to your specific situation.
Not sure if you’re claiming your working from home expenses the right way?
A quick conversation can help you understand what applies to your situation and where you might be missing opportunities.
Book a Clarity Call with the team at 360 Financial Strategists and get a clearer picture of your tax position and overall financial strategy.
The fixed rate is set by the ATO and is applied per hour worked from home. It is designed to cover common running expenses such as electricity, internet, and phone usage. The exact rate does change over time, so it’s important to check the latest ATO guidance.
Yes, you can claim WFH expenses if you meet the eligibility criteria and have the appropriate records. The claim must relate directly to your work and not be reimbursed by your employer.
The shortcut method has been removed. Taxpayers now need to use either the fixed rate method or the actual cost method, both of which require more detailed record-keeping. The current fixed rate is now 70 cents in 2026 with record keeping required.
You generally cannot claim WFH expenses without records. Even under the fixed-rate method, you need to show your work-from-home hours and provide evidence of the relevant expenses.
The RBA raised the cash rate to 4.10% in March 2026. Here’s what the decision means for Australians, mortgage holders, investors and the economic outlook.
Cash rate
The RBA increased the official cash rate target to 4.10%.
Previous rate
The previous cash rate target was 3.85% following the February 2026 decision.
The board vote was split, with five members supporting the rate increase and four voting to hold rates steady, highlighting uncertainty about the future path of monetary policy.
Decision: Increase
Change: +0.25% (25 basis points)
Key comments from the RBA statement
Inflation increased again in the second half of 2025, raising concerns that inflation may remain above the target range longer than expected.
Global conflict in the Middle East has pushed fuel prices higher, potentially adding further inflation pressure.
Domestic demand strengthened, particularly through higher business investment.
The labour market remains tight, with unemployment slightly lower than expected.
Housing activity and prices grew strongly over the past year, although growth moderated slightly at the start of 2026.
Overall, the RBA indicated there is a material risk inflation will stay above target, which justified tighter monetary policy.
Cost of living implications
The RBA is raising rates to bring inflation back to its 2–3% target range.
However, higher interest rates can increase short-term financial pressure for households through:
Higher mortgage repayments
Increased borrowing costs
Continued inflation pressures from energy and fuel prices
The central bank’s comments suggest inflation risks remain elevated, particularly if global energy prices continue to rise.
Borrowing impact
When the cash rate rises, banks typically increase interest rates on:
Variable home loans
Personal loans
Business lending
This can reduce borrowing capacity for new home buyers and businesses while increasing repayment costs for borrowers.
Economic outlook
The RBA described the economic outlook as uncertain, with several key factors influencing future decisions:
Global geopolitical tensions
Domestic demand growth
Labour market conditions
Inflation expectations
If inflation remains persistent, further policy tightening may be considered.
Repayment example
A 0.25% interest rate increase can noticeably affect repayments.
Example scenario:
Loan amount: $600,000
Loan term: 30 years
Estimated repayment impact:
Over time, multiple rate increases can significantly affect household cash flow.
Rate pass-through from banks
Australian banks typically respond quickly to RBA decisions.
Common timeline:
However, lenders are not required to pass on the full increase.
Refinance opportunities
Rising rates are a good time for borrowers to review their mortgage.
Potential strategies include:
Borrowers who haven’t reviewed their mortgage in several years may be paying significantly above current market rates.
Property market implications
Higher interest rates can influence the housing market by:
Reducing borrowing capacity for buyers
Slowing property price growth
Increasing holding costs for property investors
However, strong population growth and housing supply constraints may continue to support demand in many Australian markets.
Share market impact
Interest rate rises often create short-term market volatility.
Common impacts include:
Higher discount rates lowering equity valuations
Pressure on consumer-focused sectors
Potential benefits for banking stocks due to higher lending margins
Long-term investing perspective
For long-term investors, interest rate cycles are normal.
Sound financial strategies include:
Maintaining a diversified portfolio
Avoiding short-term reactionary decisions
Aligning investments with long-term goals such as retirement planning
Many investors also view rate cycles as opportunities to buy assets during periods of volatility.
The next monetary policy meeting of the Reserve Bank of Australia is scheduled for:
4–5 May 2026
The interest rate decision will be announced around 2:30 pm (Sydney time) on the second day of the meeting.
At 360 Financial Strategists, we help Australians navigate interest rate changes with confidence. Whether you’re reviewing your mortgage, building wealth, or planning for retirement, our advisers can help you develop a clear financial strategy.
Book a consultation with our team today
Will interest rates go down in 2026?
Interest rate movements depend on inflation, employment data, and economic growth. The RBA reviews these indicators regularly before making decisions.
How often does the RBA change interest rates?
The RBA board meets monthly (except January) to review monetary policy.
Should I fix my mortgage rate now?
This depends on your financial situation, risk tolerance, and long‑term plans. A mortgage adviser can help evaluate the pros and cons.
Reserve Bank of Australia – Monetary Policy Decision (17 March 2026)
https://www.rba.gov.au/media-releases/2026/mr-26-08.html
If you own (or are thinking about selling) an investment property in Australia, chances are you’ve asked:
Capital Gains Tax (CGT) can significantly impact your net sale proceeds — but with the right structure and advice, it may be managed effectively within the rules set by Australian law.
This guide explains how CGT works, when exemptions may apply, and how to structure your property decisions carefully and legally.
In Australia, capital gains tax is not a separate tax. It forms part of your income tax and applies when you sell an asset — including real estate — for more than you paid. CGT is administered by the Australian Taxation Office (ATO).
When you sell an investment property:
Capital Gain = Sale Price – Cost Base
If you’ve owned the property for more than 12 months, individuals and trusts may be eligible for the 50% CGT discount.
PPOR meaning stands for Principal Place of Residence. It is your main home. If a property qualifies as your main residence, you may be eligible for the main residence exemption, meaning you may not pay CGT on its sale.
To qualify as your PPOR, the property generally must:
The main residence exemption may allow you to avoid paying CGT when selling your home.
However, complications arise when:
This is where the 6-year rule becomes important.
The 6-year rule allows you to treat a former main residence as your PPOR for tax purposes even after you move out — for up to six years if it is used to produce income.
If:
You may still claim it as your main residence for up to six years while it’s rented. If you move back in, the 6-year period resets.
This strategy is commonly used by:
But — and this is critical — you can generally only have one main residence at a time for CGT purposes (with limited exceptions).
There is no minimum time requirement stated in legislation. However, the ATO looks at intent and evidence.
Simply moving in briefly before selling is unlikely to qualify if it appears to be tax-driven rather than genuinely residential.
Short-term occupancy purely for tax advantage may be challenged.
There is no simple “avoidance” method — but there are legal exemptions and strategies.
Here are legitimate scenarios where CGT may be reduced or eliminated:
If the property qualifies as your PPOR, CGT may not apply.
As explained above, you may retain PPOR status temporarily.
If the property was:
You may receive a partial CGT exemption.
Capital losses from other investments (e.g., shares) can offset capital gains.
Individuals may qualify for the 50% CGT discount if they own the asset for longer than 12 months.
Certain SMSF strategies may offer tax efficiency, but these require professional advice and strict compliance.
The more accurate question is:
How can I legally minimise capital gains tax?
Strategies may include:
Deliberate tax avoidance schemes are illegal. Always work within ATO guidelines.
Case Study:
Emma bought a Melbourne apartment in 2015 for $600,000.
She lived in it for 3 years, then moved interstate and rented it for 4 years.
She sold in 2025 for $900,000.
Because she used the 6-year rule and did not nominate another main residence, she may be eligible for a full CGT exemption.
However, if she had purchased and nominated another PPOR during that time, the outcome would differ.
This is why strategic advice matters.
Ownership structure impacts tax:
Each has different tax consequences and asset protection considerations.
At 360 Financial Strategists, this is where integrated advice becomes powerful — looking at lending, tax implications, and long-term wealth planning together.
Selling in:
may reduce overall tax impact.
This requires:
Capital gains tax decisions often intersect with:
A poorly timed sale can cost tens of thousands in unnecessary tax. A well-structured plan may preserve significantly more wealth.
Selling an investment property is not just a property decision — it’s a tax decision, a cash-flow decision, and often a retirement decision.
Understanding:
can make a substantial financial difference.
But the interpretation of tax law is complex. If you’re considering selling, restructuring, or converting a property from investment to owner-occupied, it’s worth having a structured strategy conversation first.
At 360 Financial Strategists, we take an integrated approach to:
Because smart property decisions should support your broader financial life — not create unexpected tax shocks. If you’re planning a sale, let’s model it properly before you sign the contract.
You may qualify for:
Professional advice is essential to confirm eligibility.
It allows you to treat a former home as your main residence for up to six years while renting it out, provided you do not nominate another main residence during that time.
There is no fixed minimum period. The property must genuinely be your principal place of residence. The ATO assesses intention and evidence.
CGT cannot be “avoided” through schemes. It may be reduced through legal exemptions and structured planning.
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