Budget Special edition: What you need to do
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What major tax changes are introduced in the 2026 Budget?
Hello and welcome to the Australian's Money Puzzle podcast. I'm James Kirby. Welcome aboard, everybody. Well, it's our budget special and this was the most important budget for years, folks. If you're an investor of any description, there are significant, and I mean significant, Right, I mean sweeping tax changes across the board that will affect every area of investment. Specifically, property obviously comes to mind straight away, but capital gains tax is applicable on any gain, on anything. So we've got big changes in how you're taxed on profits you make, basically from investments in property, in family trusts, how things are structured. Many of these... changes. They've been threatened repeatedly.
I mean, to be honest, they've been on the agenda a long time. In 2016, the shortened Labour government tried 90% of these changes and they had no chance, basically, of getting them through. Here we are 10 years later and the budget has brought them upon us. My guest today is Will Hamilton of Hamilton Wealth Management. He has yet again volunteered to take the hot seat on the budget special. How are you, Will?
Very well, James. Thanks for having me.
It's great to have you. You know, some years, folks, we talk before the show and we're basically trying to find what's the most interesting parts of the budget. This year, we talk before the show and we say, how much can we get in? Like, what will we prioritize? Because there's so much around. I want to cut to the chase straight away and let's look at CGT because that's the big one, isn't it, Will, really? Because it cuts across everything.
It is. It is the really big one. And look, it materially increases the effect of tax paid on long-term investments for Australians, particularly where returns are driven by capital growth rather than income. I think the other thing that was surprising was pre-1985 assets are now going to be taxable for gains accrued from July 27 onwards as well. So these are big changes and there's other implications in there as well.
They are. And as you mentioned, thanks for mentioning that, this pre-1985 issue. We'll talk about that in a minute, folks. And it's applicable, obviously, largely to older people or someone who was lucky enough to be involved with assets for a long time. But that one wasn't leaked, for instance. Just about most of this budget was leaked in various ways. through the media. And that's why we have been talking about it for some time. But let's talk about what we know now, what we know, what we found out, and what you as an investor can do from here. So Will, this capital gains tax, just to refresh everyone's memory on this, how it works for a long time since 1999 is that if you make a profit on any investment, okay, a property, shares, anything, sell a business,
you are taxed at your marginal rate. We'll assume your marginal rate is the highest marginal rate. Just make it simple, 47%. However, if you hold the asset for more than one year, you get a 50% discount on the tax you are... on your tax bill. Which... has been very useful for many people for a long time, particularly because that was introduced to cover inflation-related issues. And inflation was very low, as you know, in the past, for much of the period, actually, that this has been in place since 1999. Now the government has changed the game and they're going to go back to the old system where every year the tax assessment will be adjusted for inflation and it is going to sharply increase under almost any scenario you can imagine.
It's going to sharply increase the amount of tax you pay on a property, on shares. We might just start with property, Will. And to make it simple for everybody, I'm going to talk about property first, though. I will do a full property special show next Tuesday with Stuart Weems. So look out for that. But just on property, they seem to have been hit hard as well because they get, number one, they have CGT arrangements have changed where they have effectively a higher tax. And number two, negative gearing, again, threatened for a long time, is now restricted only to new properties.
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Chapters
4 chapters
1
What major tax changes are introduced in the 2026 Budget?
0:10–8:50
2
How will the Capital Gains Tax changes affect investors?
8:50–20:05
3
What impact does the new negative gearing policy have on property investments?
20:05–29:47
4
What are the implications for corporate versus individual investors?
29:47–30:55