With a Budget full of tax changes, this article outlines the announcements that affect individuals. Some of the changes are re-announcements and some are new. Details of the most substantial changes can be found in links to articles that provide greater analysis.

Personal tax rates

These changes were originally announced in prior budgets and are already legislated.

From 1 July 2026 the lowest marginal tax rate reduces from 16% to 15%. This reduces tax payable by a maximum of $268, $5 a week – less than the cost of a cup of coffee.

From 1 July 2027 the lowest marginal tax rate is further reduced from 15% to 14%.

Working Australian Tax Offset

This is a 2026 Budget announcement. For the income year ended 30 June 2028, employees and sole traders will be able to access a $250 Working Australians Tax Offset (WATO). This offset is permanent and is not refundable.

This amount will be automatically calculated and applied by the Australian Taxation Office (ATO) when a person lodges their income tax return after July 2028.

$1,000 Standard deduction

This was announced as part of the 2025 election campaign and is yet to be legislated. However, draft legislation has been released for consultation.

It is proposed that the $1,000 standard deduction will be available to those who have had pay-as-you-go-withholding applied to their income. Unlike the WATO, it will not be available to sole traders.
Those with no work-related deductions or less than $1,000 of work-related deductions can claim the $1,000 standard deduction.

Those with more than $1,000 of work-related deductions can still claim the full amount but will need to continue to fully substantiate all those deductions.

CA ANZ’s submission on the consultation recommends that the draft legislation allow those with more than $1,000 of work-related deductions the choice to apply the $1,000 standard deduction rather than documenting all their expenses. So if you have $1,100 of work-related expenses, you can opt to claim $1,000 without substantiation rather than document all $1,100.

CGT changes

The CGT changes include:

• A minimum 30% tax on net capital gains accruing from 1 July 2027
• The 50% CGT discount on capital gains being replaced by indexation of the cost base from 1 July 2027
• Pre-CGT assets being subject to capital gains tax from 1 July 2027.

Further details regarding these changes can be found in a separate article on the 2026 Budget page.

Negative gearing

Negative gearing will no longer be available for purchasers of existing residential properties after 1 July 2027. Further details regarding this change can be found in a separate article on the 2026 Budget page.

30% minimum tax on trust distributions

A 30% minimum tax on trust distributions will apply from 1 July 2028. Further details regarding this change can be found in a separate article on the 2026 Budget page.

Electric vehicles and Fringe Benefits Tax

With the budget cost of providing a fringe benefits tax (FBT) exemption for electric vehicles (EVs) rapidly increasing and the Productivity Commission criticising the cost effectiveness of the exemption in reducing carbon emissions, the government is winding back the EV FBT exemption. Taking heed of New Zealand’s experience in withdrawing support for EVs, the government has chosen a staged reduction in the EV FBT exemption rather than withdrawing it straight away.

So how is the EV FBT exemption being wound back?

• Existing novated leases and novated leases up to 1 April 2029, that qualify for the current EV FBT (that is EVs that cost less than the luxury car limit of approximately $91K) are unaffected.
• From 1 April 2029 the EV FBT exemption will only apply for new novated leases for vehicles costing less $75,000.
• From 1 April 2029 the EV FBT exemption will not be available for new novated leases.

Novated leases for EVs that cost less than luxury car limit but do not qualify for the FBT exemption will be only be liable for 75% of the FBT relating to the lease.

Importantly, reportable fringe benefits will continue to be determined as if the full FBT cost was applied.

Medicare levy low-income thresholds

These have increased by 2.9% from 1 July 2025. The new rates are:

• Single $28,011
• Family $47,238
• Single seniors and pensioners $44,268
• Family seniors and pensioners $61,623
• Each dependent $4,216