On 12 May 2026, Australian Treasurer Jim Chalmers delivered one of the most significant Budgets in recent times, as it fundamentally changes the taxation of capital and trusts. 

Tonight's Budget fundamentally rewrites the rules on capital gains. For the first time in 40 years, pre-1985 assets are being brought into the tax net. The 50 per cent discount is replaced by indexation, and a new 30 per cent minimum tax applies to all capital gains. 

This year’s Budget delivers one of its most consequential announcements by fundamentally changing how negative gearing is applied to residential real estate. The Government has restricted negative gearing to new residential properties, ending decades of tax concessions for investors in existing homes.

The Electric Vehicle Fringe Benefits Tax (EV FBT) exemption has been scaled back to address a concession that has become increasingly expensive. Redirecting this support over time into better targeted incentives will also deliver stronger emissions reductions.

New rules for discretionary trusts, including a proposed 30 per cent minimum tax on distributions, could affect many small businesses. These are significant changes and time will tell how they impact small businesses.

The Working Australians Tax Offset gives workers some immediate relief, but it doesn't fix the underlying problem of bracket creep, which continues to push Australians into higher tax bands without any increase in real income.