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The Federal Government has handed down the 2026–27 Federal Budget, with several important announcements that may affect your business, investments, tax planning and cash flow over the coming years.

Below is a summary of the key measures most relevant to small and medium businesses, business owners and investors.

Permanent $20,000 Instant Asset Write-Off

One of the most significant announcements in the 2026–27 Federal Budget is that the $20,000 instant asset write-off will become permanent from 1 July 2026.

Eligible businesses with turnover under $10 million will continue to be able to immediately deduct the full cost of eligible assets costing less than $20,000 each, rather than depreciating them over several years.

This provides greater certainty for:

• Equipment purchases
• Vehicles
• Tools and machinery
• Office technology
• Fit-outs and business improvements

Importantly, the threshold applies per asset, meaning multiple qualifying purchases may still be deductible.

PAYG Instalment Flexibility

The Government has announced changes aimed at improving business cash flow management.

From 1 July 2027:

• Businesses will be able to opt into monthly PAYG instalments.
• Expanded dynamic PAYG instalments will allow payments to better align with actual business performance using ATO-approved software calculations.

This may particularly assist businesses with fluctuating income or seasonal trading patterns.

Company Tax Loss Carry-Back Returns

From 2026–27, companies with turnover up to $1 billion will again be able to carry back tax losses for up to two prior income years and potentially receive refunds of tax previously paid.

This measure is designed to assist business cash flow during periods of reduced profitability or economic downturn.

Businesses operating through company structures should review future tax planning opportunities carefully.

Refundable Tax Losses for New Start-Ups

From 2028–29, eligible start-up companies with turnover under $10 million may become entitled to refundable tax offsets for losses incurred during their first two years of operation.

This measure is intended to encourage entrepreneurial investment and assist early-stage businesses with cash flow.

Electric Vehicle (EV) FBT Changes

The Budget also announced changes to Fringe Benefits Tax concessions for electric vehicles.

Current full FBT exemptions for eligible EVs will gradually transition to a 25% FBT discount arrangement over future years.

Businesses considering vehicle purchases or salary packaging arrangements should review timing carefully before making commitments.

Proposed Capital Gains Tax (CGT) and Negative Gearing Changes

The Budget also flagged substantial proposed reforms to investment taxation, including:

• Changes to the current 50% CGT discount.
• Restricting negative gearing on established residential investment properties.

At this stage, these measures are proposals only and remain subject to legislation being passed.

These reforms could have major implications for:

• Property investors
• Family groups
• Discretionary trusts
• Succession planning
• Investment structuring

Clients with investment portfolios or trust structures should seek advice before making significant transactions.

Proposed Minimum Tax for Discretionary Trusts

The Government has also indicated proposed future measures involving minimum taxation arrangements for discretionary trust distributions.

Again, these measures are not yet law, but they may significantly impact family group tax planning and distribution strategies in future years.

New Tax Offsets and Individual Measures

Additional announcements include:

• A proposed $250 Working Australians Tax Offset from 2027–28.
• A new $1,000 instant deduction for work-related expenses for individuals.
• Further low-income tax threshold adjustments.

These measures may affect business owners personally as well as employees.

What Should You Do Now?

Many of these measures are still proposals and will require legislation before becoming law. However, the announcements signal the Government’s direction and may influence:

• Business investment decisions
• Property strategies
• Trust distributions
• Capital gains timing
• Business structuring
• Vehicle purchases
• Cash flow planning

Reviewing your position early may help you identify opportunities and prepare for future changes.

How KBD Professional Can Help

Understanding the implications of the 2026–27 Federal Budget can be challenging, particularly when many measures remain subject to legislative approval.

At KBD Professional, we work closely with business owners to provide practical advice tailored to their circumstances. Whether you’re considering asset purchases, reviewing your business structure, managing investments or planning trust distributions, our experienced team can help you make informed decisions with confidence.

Contact KBD Professionals Today

If you would like assistance understanding how these proposed Budget changes may affect your business or personal circumstances, contact us to arrange a review.

Our team can help you assess the opportunities, risks and planning strategies relevant to your situation so you can move forward with clarity and confidence.