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Director / Co-Founder / Mortgage Broker
If your Victorian land tax assessment landed heavier than expected this year, you’re not imagining it. A lower general threshold, an expanded Vacant Residential Land Tax, and a wider net for undeveloped land have all combined to push more Melbourne investors into paying land tax, often for the first time. If you own an investment property in Victoria, or you’re weighing up buying one, here’s what’s actually changed and what it means for your next decision.
1. Why Victorian Land Tax is Back In The Spotlight For 2026
2. How Victorian Land Tax Actually Works
3. Vacant Residential Land Tax (VRLT): What’s Changed
4. What This Means If You’re Deciding to Buy, Sell or Hold
5. Other 2026 Changes Worth Knowing About
6. What Should Melbourne Investors Do Next?
Victoria now has the lowest land tax threshold in the country. That, combined with a Vacant Residential Land Tax that now applies statewide rather than just to inner Melbourne, means a lot of investors who never had to think about land tax before are now getting assessments. For some, it’s a modest annual cost. For others, particularly those holding several properties or land that’s sat undeveloped, it’s become a genuine factor in whether a property still stacks up.
This isn’t a one-off change to plan around and forget. It’s the new baseline for owning investment property in Victoria, which makes it worth understanding properly rather than just paying the bill each year and moving on.
Since 1 January 2024, the general land tax threshold for individually owned land in Victoria has been $50,000 of aggregated site value, down from $300,000 previously. If you hold property through a trust, the threshold is even lower, at $25,000. Compare that to a state like New South Wales, where the tax-free threshold sits above $1 million, and it’s clear why Victorian investors are noticing this more than most.
The key word is “aggregated”. Land tax isn’t assessed property by property, it’s based on the combined site value of every taxable property you own in Victoria as at midnight on 31 December of the previous year. So the land tax you’re assessed for in 2026 reflects what you owned at midnight on 31 December 2025, even if you’ve since sold or bought something.
Land tax is calculated on site value, meaning the value of the land itself as determined by the Valuer-General, not the value of the house or any other improvements sitting on it. The rate structure is progressive, starting at a modest flat amount for portfolios just over the $50,000 threshold and increasing in stages, with the top bracket sitting well above $30,000 plus a percentage of everything above $3 million in aggregated site value.
Because the exact bracket you fall into depends on your total holdings, ownership structure, and whether a trust or absentee owner surcharge applies, the most reliable way to get an accurate figure is the State Revenue Office’s own land tax calculator, rather than relying on a single example. It’s a good exercise to run before buying an additional property, not just after the fact.
Vacant Residential Land Tax used to be limited to a handful of inner and middle Melbourne council areas. From 1 January 2025, it expanded to apply statewide. Then, from 1 January 2026, the net widened again to catch certain long-undeveloped residential land in metropolitan Melbourne, specifically land that’s sat undeveloped for five years or more despite being suitable for housing. This second change is squarely aimed at land banking, where developable land is held vacant rather than built on.
VRLT is charged on a property’s capital improved value, not its site value, and the rate increases the longer a property stays vacant: 1% for the first year it’s liable, rising to 2% for a second consecutive year, and 3% for three or more consecutive years. Unlike general land tax, there’s no tax-free threshold, so it can apply from the first dollar of value.
Plenty of legitimate ownership situations are exempt from VRLT, but they’re not automatic, you need to notify the SRO annually even where you believe an exemption applies. Common exemptions include:
If you’ve had a property sitting empty between tenants, under renovation, or on the market longer than expected, it’s worth checking which of these applies before assuming VRLT is payable.
The rising cost of holding property in Victoria has pushed some investors to sell, and that’s a legitimate response for a portfolio that was only marginally cash flow positive before these changes. But it’s not the whole picture. Melbourne’s rental vacancy rate sat at just 1.5% in April 2026, a sign that underlying rental demand remains genuinely tight despite the wave of investor exits over the past couple of years. Auction clearance rates have also been climbing, and the state government has introduced stamp duty concessions on off-the-plan purchases for both investors and first home buyers, a sign it wants investment activity to keep flowing back into the market.
The sell-or-hold question isn’t really answered by how big the tax bill looks on its own. It comes down to proper cash flow modelling for the specific property, factoring in land tax, loan structure, rental income and your broader goals, rather than a gut reaction to the assessment notice. Ownership structure matters here too. Whether a property sits in your own name, a trust, or alongside other properties changes both the threshold you’re measured against and the rate you pay, which is exactly the kind of detail worth reviewing with your broker and adviser together rather than in isolation.
A few related changes are worth being aware of even if they’re not the main event. Vendors can no longer pass on land tax liability to buyers in most residential property contracts signed from 1 January 2026, which affects how settlements are negotiated. A Short Stay Levy of 7.5% now applies to booking revenue from short-term rental platforms across the state. And absentee owners, generally those based overseas, face an additional surcharge on top of standard land tax rates. None of these change the core land tax picture, but they’re worth factoring in if they apply to your situation.
A few practical steps are worth taking regardless of where you sit:
At 360 Financial Strategists, we are here to help. 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
What is the land tax threshold in Victoria in 2026? The general threshold is $50,000 of aggregated site value for individually owned land. Land held in a trust has a lower threshold of $25,000. Both apply to the combined value of all taxable Victorian land you own, not each property separately.
How is Victorian land tax calculated? It’s calculated on the site value of your land, as determined by the Valuer-General, aggregated across everything you own in Victoria as at midnight on 31 December of the previous year. Rates increase progressively above the threshold. The State Revenue Office’s online calculator gives the most accurate figure for your specific situation.
What is vacant residential land tax (VRLT) and who does it apply to? VRLT is an annual tax on residential land in Victoria that was vacant for more than six months in the previous year. It’s charged on capital improved value at 1% for the first year of liability, rising to 2% and then 3% for consecutive years of vacancy. It now applies statewide, and from 2026 also catches certain long-undeveloped residential land in metropolitan Melbourne.
Can I avoid VRLT if my property is genuinely for sale? Generally yes. A property that’s continuously and genuinely listed for sale or rent at market rates is typically exempt, but you still need to notify the SRO of the exemption rather than assuming it applies automatically.
Does land tax apply to my own home? No. Your principal place of residence is generally exempt from both general land tax and vacant residential land tax, provided it genuinely meets the occupancy requirements.
The Reserve Bank of Australia (RBA) has decided to leave the official cash rate unchanged at 4.35% at its 11 August 2026 Monetary Policy Board meeting.
The decision was unanimous and follows three increases in the cash rate earlier this year. The RBA says financial conditions have tightened and the Australian economy appears to be slowing as expected, but inflation remains too high.
For Australians, the key message is that a rate hold does not necessarily mean the pressure is over. The RBA remains concerned about inflation and has explicitly stated that it could increase the cash rate again if upside risks to inflation materialise.
The decision was widely expected by economists and major banks after the RBA lifted rates three times earlier this year.
Inflation remains the central concern.
The RBA says headline inflation is still too high, while trimmed mean inflation remains elevated and is little changed from the March quarter.
Higher oil and commodity prices are also creating additional inflationary pressure. The RBA notes that some businesses are already passing higher costs through to consumers, while others are considering doing so.
Importantly, the RBA expects inflation to remain high for some time and does not expect inflation to return to around the midpoint of its target range until late 2027.
The Board therefore remains prepared to increase the cash rate again if upside inflation risks materialise.
The rate hold provides some stability for households, borrowers and businesses, but it does not necessarily signal that lower interest rates are around the corner.
The RBA is attempting to balance two competing priorities: bringing inflation back under control while avoiding an unnecessarily sharp slowdown in economic activity.
The RBA’s latest statement highlights continued pressure from higher energy and fuel prices.
The disruption to global oil supply is adding directly to inflation, and the RBA says there are indications that higher fuel prices are being passed through into the prices of other goods and services.
For Australian households, this could mean continued pressure on everyday expenses even though the cash rate has been left unchanged.
Families and young professionals may therefore continue to feel the effects through household budgets, transport costs and the prices of goods and services.
The cash rate remaining at 4.35% means there is no new RBA rate increase flowing directly from today’s decision.
However, borrowing costs remain elevated because monetary policy is still considered somewhat restrictive.
The RBA also reports that new housing loans have declined noticeably, suggesting higher borrowing costs and tighter financial conditions are continuing to influence housing activity.
For prospective borrowers, this means affordability and borrowing capacity remain important considerations.
The economic outlook remains uncertain.
The RBA says consumer spending growth is gradually slowing, while business debt and investment remain strong. Labour market conditions have also eased somewhat more than expected in recent months.
At the same time, there are significant risks surrounding the Middle East conflict, global oil supply and international economic growth.
The RBA also highlights Australia’s historically weak productivity growth as a constraint on potential economic growth.
Overall, the economy appears to be slowing as expected, but the inflation outlook remains a major concern.
For mortgage holders, today’s decision provides some short-term certainty, but the broader interest rate environment remains important.
Because the RBA has held the cash rate at 4.35%, there is no additional RBA-driven rate increase from today’s decision.
For example, a borrower with a $600,000 variable-rate mortgage would not face an increase in repayments solely because of today’s RBA decision.
However, individual lenders set their own mortgage rates, so borrowers should check their current interest rate and repayments rather than assuming their loan rate has remained unchanged.
The RBA decision itself does not automatically set the interest rate on an individual home loan.
Banks and other lenders determine their own lending rates and may respond differently depending on their funding costs and competitive position.
With the RBA holding at 4.35%, mortgage holders should monitor any communication from their lender and compare their current loan rate with the broader market.
A rate hold can be a useful reminder to review your mortgage rather than simply waiting for the next RBA decision.
Borrowers may wish to compare:
Even when the cash rate is unchanged, the difference between individual home loan offers can affect household cash flow over time.
The latest RBA decision also has implications for investors and Australians planning for their financial future.
The important consideration is that the economic environment remains mixed: inflation is elevated, consumer spending is slowing, business investment remains strong and uncertainty around global conditions is high.
The RBA reports that momentum in the housing market has shifted.
Housing prices are falling in some capital cities, while new housing loans have declined noticeably.
Higher borrowing costs and tighter financial conditions can affect purchasing power and demand, making the property market an important area to monitor.
For property investors and prospective buyers, the latest RBA statement reinforces the importance of assessing cash flow, borrowing costs and the ability to manage repayments under different interest rate scenarios.
The RBA’s decision may also be relevant to share market investors because interest rates influence borrowing costs, economic growth expectations and company valuations.
However, the statement itself does not provide a forecast for the Australian share market.
Investors should therefore avoid interpreting the rate hold as automatically positive or negative for equities. Instead, the broader combination of inflation, economic growth, business investment and global uncertainty is likely to remain relevant to investment markets.
For investors and pre-retirees, the current environment reinforces the value of having a financial strategy that can withstand uncertainty.
Areas worth reviewing may include:
The RBA’s statement makes clear that the path for inflation and interest rates remains uncertain, so financial decisions should be based on longer-term goals rather than trying to predict the next RBA move.
The RBA says future monetary policy decisions will be guided by incoming data and its evolving assessment of the economic outlook and risks.
The Board will continue to monitor inflation, economic activity, employment and other developments before deciding whether further changes to the cash rate are required.
The next update will be September 28th 2026.
The key takeaway from today’s announcement is that 4.35% is not necessarily the end point. The RBA has explicitly stated that it will increase the cash rate further if upside inflation risks materialise.
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 (11 August 2026)
https://www.rba.gov.au/media-releases/2026/mr-26-19.html
Director / Co-Founder / Mortgage Broker
Investing in property remains one of Australia’s most popular wealth-building strategies. Whether you’re purchasing your first investment property or expanding your portfolio, understanding the ongoing costs—and more importantly, which expenses are tax deductible—can make a significant difference to your long-term returns.
Many investors focus on rental income and capital growth but overlook the tax opportunities available throughout the financial year. Knowing what you can claim, when you can claim it, and how different expenses are treated can help improve your cash flow while ensuring you remain compliant with Australian Taxation Office (ATO) requirements.
Here’s what every Australian property investor should know.
Owning an investment property comes with a range of ongoing expenses. While many of these costs may be tax deductible, not every expense receives the same tax treatment.
Understanding the difference between immediately deductible expenses and those that must be claimed over time can help you:
A proactive approach to tax planning can help investors make smarter financial decisions throughout the year—not just at tax time.
The ATO allows landlords to immediately claim many day-to-day expenses associated with managing a rental property.
Common immediately deductible expenses include:
These expenses are generally deductible in the same financial year they are incurred, helping reduce your taxable income sooner.
One of the most common areas of confusion for property investors is understanding the difference between repairs and capital improvements.
Repairs restore something that has become damaged or worn through normal use.
Examples include:
These expenses are usually immediately tax deductible.
Improvements increase the property’s value, extend its life, or improve its functionality.
Examples include:
These costs generally cannot be claimed immediately and instead are claimed over several years through capital works deductions or depreciation.
Understanding this distinction can have a significant impact on your annual tax outcome.
Some investment property costs provide long-term value and therefore must be claimed progressively.
These may include:
Structural improvements are generally claimed at 2.5% per year over 40 years, depending on eligibility.
Costs associated with obtaining your investment loan may include:
These are generally claimed over the life of the loan or five years, depending on the expense.
Assets with a limited effective life may be depreciated over time, including:
Understanding depreciation can unlock valuable tax savings over the life of your investment.
Not every expense associated with owning an investment property is tax deductible.
Generally, you cannot claim:
Knowing what cannot be claimed is just as important as knowing what can.
Timing can make a difference.
If you’ve been delaying necessary repairs or maintenance, completing the work before 30 June may allow you to claim those deductions sooner, potentially reducing your taxable income for the current financial year.
Similarly, if you’re planning major capital improvements, completing the work before year-end allows depreciation or capital works deductions to begin earlier.
Planning ahead rather than rushing at tax time often leads to better financial outcomes.
Investment property taxation can become increasingly complex as your portfolio grows.
Working with an experienced accountant helps ensure you:
Pairing professional tax advice with an experienced property manager can also help reduce the day-to-day workload while protecting your investment.
Property investing is about more than purchasing the right property—it also requires careful financial management.
Understanding how investment property tax deductions work allows Australian investors to improve cash flow, maximise returns, and make more informed financial decisions throughout the year.
Whether you’re buying your first investment property or managing multiple rental properties, seeking professional advice can help ensure you’re making the most of every available opportunity.
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.
Director / Co-Founder / Mortgage Broker
Date: Thursday 20th August
Watch our complimentary one-hour educational webinar exploring practical strategies to help protect your family’s financial future.
Our panel of experienced professionals discussed the role of financial planning, collaborative law, and education bonds, providing valuable insights into how these areas work to support families through life’s important milestones and transitions.
Whether you’re planning ahead, preparing for your children’s education, or simply looking to make informed financial decisions, this session will provide practical guidance and the opportunity to have your questions answered live.
In this webinar we covered
Stephanie is passionate about empowering clients to feel confident and in control of their financial future. She works closely with individuals, couples, and young families to build smart, personalised strategies that evolve with life — from achieving first home ownership and navigating career or family milestones to growing long-term wealth and preparing for a comfortable, secure retirement.
Shai, an Accredited Specialist in Family Law. Is a determined, strategic and empathetic advocate who is recognised by the family law profession as a specialist in the field. Shai's clients comment on his unrivalled work ethic and commitment to listening to their needs as well as his commercial and practical focus.
Business Development Manager at Futurity Investment Group. Amy's career is marked by her ability to challenge traditional approaches within the financial advisory sector, leveraging her deep knowledge and perseverance to create growth opportunities for Advisers. Amy is passionate about advocating for financial literacy and independence, inspiring others to achieve financial empowerment.
Andrew is a highly experienced Financial Adviser and Partner of the firm, with a passion for helping clients make confident, well-informed decisions about their money. With more than a decade of experience across wealth creation, retirement planning, and risk management, he is known for his calm, strategic approach and his ability to turn complex financial concepts into clear, actionable plans.
Complete the form below to receive the recording.
As the end of the financial year approaches, many Australians focus on lodging their tax return. However, some of the biggest tax-saving opportunities occur before 30 June, not after.
Whether you’re a young professional, growing family, business owner or pre-retiree, taking action before the financial year ends may help reduce your tax liability, boost your superannuation and improve your overall financial position.
The key message this year is simple: plan ahead rather than waiting until tax time.
If you have available cash flow, prepaying certain deductible expenses before 30 June may allow you to bring forward a tax deduction into the current financial year.
Common examples may include:
By paying before 30 June, you may receive the tax benefit sooner rather than waiting until the following financial year. However, not all expenses qualify, so professional advice is important.
The Australian Taxation Office has indicated ongoing focus on:
Maintaining accurate records remains essential when preparing your tax return.
Income Protection Insurance Deductions
Many Australians are unaware that premiums paid for income protection insurance may be tax deductible.
However, only the portion covering loss of income is generally deductible. Other forms of personal insurance such as life insurance, trauma insurance or critical illness cover are generally not deductible.
While tax deductions often receive the most attention, superannuation contributions can be equally valuable from a long-term wealth-building perspective.
The annual concessional contribution cap is currently $30,000 and includes:
Reviewing your contributions before 30 June can help determine whether there is remaining capacity available within your cap.
Australians under age 75 may be eligible to contribute up to:
Before making additional contributions, it’s important to consider your total super balance and contribution limits.
One of the most commonly overlooked EOFY issues is timing.
Super contributions count when the money is received by the super fund—not when the payment is sent. Leaving contributions until the final days of June can potentially create issues if processing delays occur.
EOFY can be an excellent opportunity to:
Families may benefit from:
Business owners should consider:
For Australians approaching retirement, EOFY may provide an opportunity to:
Before 30 June, consider:
✔ Reviewing deductible expenses
✔ Checking income protection insurance deductions
✔ Reviewing concessional contribution limits
✔ Assessing non-concessional contribution opportunities
✔ Confirming super contributions are received before EOFY
✔ Ensuring records are accurate and up to date
The earlier these steps are completed, the greater flexibility you may have before financial year-end.
With 30 June fast approaching, now is the ideal time to review your tax position, super contributions and financial strategy.
Whether you’re looking to reduce your tax liability, grow your superannuation or prepare for the year ahead, taking action before EOFY could make a meaningful difference.
Book a conversation with our team today and discover the opportunities available before the financial year ends.
Depending on your circumstances, you may be able to claim work-related expenses, income protection insurance premiums, investment-related expenses and other eligible deductions. Keeping accurate records is essential.
In some cases, yes. Certain eligible expenses can be prepaid before 30 June, allowing you to claim the deduction in the current financial year. Always seek advice to confirm eligibility.
The concessional contribution cap is $30,000 per year and includes employer super contributions, salary sacrifice contributions and personal deductible contributions.
Eligible Australians may be able to contribute up to $120,000 per year as non-concessional contributions, or up to $360,000 under the bring-forward rule, subject to eligibility requirements.
As early as possible. Super contributions count when they are received by your super fund, not when you transfer the money. Processing delays near 30 June can result in missed opportunities.
Generally, yes. Premiums that cover loss of income may be tax deductible. However, life insurance, trauma insurance and total permanent disability cover are generally not deductible when held personally.
Exceeding contribution caps can result in additional tax and reporting requirements. It’s important to review your contributions before making additional payments.
EOFY is one of the best times to review your tax position, superannuation strategy and broader financial goals. Professional advice can help ensure you don’t miss valuable opportunities.
The RBA has held the cash rate at 4.35% in June 2026. Learn what the latest interest rate decision means for mortgages, cost of living, property investors and financial planning across Australia.
The Reserve Bank of Australia (RBA) has decided to hold the official cash rate at 4.35% following its June 2026 Monetary Policy Board meeting. This follows three rate increases earlier in 2026 and signals that the RBA is taking time to assess the impact of previous tightening measures on inflation and economic activity.
The decision was widely expected by economists and major banks after the RBA lifted rates three times earlier this year.
Key themes emerging from the RBA’s messaging include:
The overall tone of the decision was cautious. While rates were left unchanged, the RBA did not indicate that rate cuts are imminent.
For households, businesses and investors, the decision provides some short-term certainty after several months of rising rates.
Holding rates offers temporary relief for Australians already dealing with:
While a pause won’t immediately reduce living expenses, it may help prevent further pressure on household budgets in the near term.
For borrowers:
Those considering purchasing property may welcome the stability, although affordability remains a challenge due to higher interest rates overall.
The RBA appears to be balancing two competing risks:
Recent data has pointed to softer consumer spending and slower economic momentum, which likely contributed to the decision to pause. However, inflation remains above target, meaning the RBA is unlikely to declare victory just yet.
Mortgage holders are among the biggest beneficiaries of this month’s decision.
Because the cash rate has remained unchanged, borrowers on variable-rate home loans should not see an increase in repayments resulting directly from this RBA decision.
For example:
This pause may provide some breathing room for households that have already absorbed multiple rate increases throughout 2026.
Most major lenders are expected to leave variable mortgage rates unchanged following the decision.
However, lenders continue to compete aggressively for quality borrowers, meaning there may still be opportunities to secure more competitive rates through refinancing.
Many Australians are discovering significant differences between their existing loan rate and rates available to new customers.
Potential opportunities include:
A mortgage review can help determine whether your current loan remains competitive in today’s market.
Interest rate decisions affect far more than mortgages.
A rate hold may help support confidence in the property market because:
However, higher rates are still weighing on borrowing power, and some markets may continue to experience slower price growth.
Share markets generally respond positively to certainty.
A hold decision can be viewed favourably because:
That said, ongoing inflation concerns mean market volatility may remain throughout 2026.
For investors and pre-retirees, now may be a good time to review:
Maintaining a long-term strategy remains important regardless of short-term interest rate movements.
The next RBA Monetary Policy Board meeting is scheduled for August 2026, when the Board will again assess inflation, employment, consumer spending and global economic conditions before determining whether rates should remain on hold, increase or eventually begin to move lower.
Many economists now believe the RBA may have reached the peak of the current cycle, although there is still considerable debate about when future rate cuts could occur.
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 (16 June 2026)
https://www.rba.gov.au/media-releases/2026/mr-26-15.html
Finhub
https://finhub.net.au/blog/rba-june-decision-three-rate-hikes-2026-borrowing-power
Your Finance Guide
https://www.yourfinanceguide.com.au/news/rba-june-2026-decision-hold-at-4-35
The Australian
https://www.theaustralian.com.au/subscribe/news/
Integrated Finance Group
https://integratedfinancegroup.com.au/blog/rba-june-2026-decision-what-borrowers-should-do/?
The 2026 Australian Federal Budget introduces tax reforms, housing policy changes and cost-of-living measures. Key changes include limiting negative gearing to new property builds, replacing the 50% capital gains tax discount with inflation indexation and a minimum 30% tax, introducing a $250 Working Australians Tax Offset, and simplifying work expense claims with a $1,000 standard deduction.
These reforms aim to improve housing affordability, support workers and strengthen the economy.
The 2026 Australian Federal Budget introduced several major reforms aimed at improving housing affordability, supporting workers, and strengthening the economy during a period of global uncertainty and elevated inflation.
The centerpiece of the Budget focuses on tax reform, property investment changes and cost-of-living relief, alongside funding changes across healthcare, aged care and disability support.
From 1 July 2027, the current 50% CGT discount for assets held longer than 12 months will be removed and replaced with inflation indexation and a minimum 30% tax on capital gains.
This change applies to:
However, transitional arrangements mean only gains from July 2027 onwards will be affected.
To improve housing supply, negative gearing will only apply to newly built residential properties from 1 July 2027.
Important details:
Negative gearing occurs when the costs of owning an investment asset, such as interest on loans, maintenance, and rates exceed the income it generates (e.g., rent). This creates a net loss, which investors can deduct from their other income, such as salary, to reduce their overall tax bill.
From 1 July 2028, the Government will introduce a minimum tax on discretionary trusts, requiring trustees to pay
tax at a minimum rate of 30% on the taxable income of the trust. Beneficiaries, other than corporate beneficiaries,
will receive non-refundable credits for the tax payable by the trustee.
The following trusts will be exempt from the new minimum tax:
The following types of income are also proposed to be excluded from the new minimum tax:
A permanent $250 Working Australians Tax Offset (WATO) will be introduced to help reduce the tax burden on workers.
Combined with previously legislated tax cuts, this increases the effective tax-free threshold to around $19,985.
From 1 July 2026, taxpayers can claim a standard $1,000 deduction for work-related expenses without needing receipts.
If actual work expenses exceed $1,000, individuals can still claim their full deductions under existing rules.
The Budget includes measures to ease household costs including:
PBS medicine refers to prescription medication subsidized by the Australian Government through the Pharmaceutical Benefits Scheme (PBS).
The Government will implement changes to the National Disability Insurance Scheme to deliver more than $36 billion in savings over four years, aiming to return the scheme to its original intent while ensuring long-term sustainability.
Small businesses receive continued support including:
These changes aim to stimulate investment and support business growth.
For many Australians, the Federal Budget delivers moderate cost-of-living relief rather than major cash payments.
Key benefits include:
However, inflation remains a major economic concern.
Inflation is forecast to reach around 5%, meaning many households may still face pressure from higher costs for essentials like housing, groceries and energy.
Australia’s economy is currently navigating:
The Budget attempts to balance economic stability with long-term structural reforms, particularly in housing and tax policy.
While savings from programs like the NDIS help improve the Budget position, economic conditions will continue to influence interest rates and financial markets in the years ahead.
The Budget introduces some of the most significant investment tax reforms in decades, particularly around property and capital gains.
Property market implications
Limiting negative gearing to new builds could shift investor demand toward off-the-plan and newly constructed properties.
However, because existing investments are grandfathered, many current investors will see no immediate change.
Changes to CGT could also affect investors holding shares and managed funds.
Key considerations include:
Importantly, the changes only apply to gains from July 2027 onwards, giving investors time to plan.
Several other Budget changes may influence financial strategies, including:
These changes could affect tax planning, business structures and retirement planning.
At 360 Financial Strategists, we help Australians navigate the financial landscape with confidence.
Book a consultation with our team today
When did the 2026 Federal Budget occur?
The Australian Federal Budget for 2026–27 was released on 12 May 2026. It outlines government spending, taxation changes and economic priorities for the coming financial year.
Will the Federal Budget affect mortgage rates?
The Federal Budget does not directly set mortgage rates. However, government spending and tax policies can influence inflation and economic growth, which may affect decisions by the Reserve Bank of Australia on interest rates.
Will the 2026 budget affect property prices?
Housing reforms introduced in the budget may influence investor demand and housing supply. Over time, increased housing construction and tax changes could help improve affordability and stabilise property prices.
Do tax cuts start immediately?
Some tax cuts begin in 2026, while additional reductions will be introduced in 2027, gradually increasing take-home pay for many Australian workers.
Budget 2026-27 – BUDGET STRATEGY AND OUTLOOK Budget Paper No. 1
Guardian – Budget capital gains tax changes and negative gearing reform explained
The Australian – New $2bn fund to turbocharge construction
The Australian – Labor’s risky reset: how the budget rewires housing market
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