MBC Group Services Parkes, Forbes and Orange THE BIG PICTURE This is one of the most important budgets in decades for anyone who owns assets like property, shares, farmland, or a business. The changes go beyond tax rates. They affect how people hold assets, set up their businesses, and plan for retirement. Regional business owners and farming families should make sure they understand what’s coming before the deadlines arrive. WHAT'S GOOD FOR SMALL BUSINESS The $20,000 instant asset write-off is now permanent. Since 2015, it was extended each year, making planning difficult. Now, that uncertainty is gone. If your business has turnover less than $10 million, you can invest in equipment knowing this deduction is here to stay. From 1 July, most workers can claim $1000 in work-related deductions without needing receipts. The 16% tax rate for lower incomes will drop to 15% this year and 14% next year. These changes may not seem dramatic, but they do make a difference. THE BIG ONE: CAPITAL GAINS TAX IS CHANGING The 50% CGT discount - which has been part of the system since 1999 - is going. From 1 July 2027, gains will be taxed on an indexed basis with a 30% minimum rate on the real gain. The key protection: anything you've built up before 1 July 2027 is safe. Only gains that accrue after that date fall under the new rules. If you hold property, shares, or farmland you've owned for years, you'll need a formal valuation at 1 July 2027 to set your new cost base. That's not optional - it's how you prove what you'd already made before the rules changed. Now is the time to understand your position, not when that deadline is weeks away. Anyone buying a new residential property will get to choose which method applies when they sell. NEGATIVE GEARING: WHAT CHANGES AND WHAT DOESN'T If you already own an investment property, you are protected. Whatever you held before 7.30pm on 12 May 2026 stays under the existing rules - negative gearing works exactly as it always has for those properties. For anyone buying an established residential property after that date, the rules are different. Losses from that property can no longer be offset against your wages or other income - they can only be carried forward against future income from the property itself. That changes the cash flow maths for new investors in residential real estate. New residential builds are fully exempt from this change, which is deliberate - the Government wants to encourage new housing supply. Commercial property and shares are also unaffected. For most farming families and small business owners in the Central West, the practical question is simple: did you own your investment property before budget night? If yes, nothing changes for you. FAMILY TRUSTS: THE ONE THAT NEEDS ATTENTION SOONEST From 1 July 2028, discretionary trusts face a minimum 30% tax on distributions. Right now, trust income flows to beneficiaries at their individual rates - sometimes much lower. That flexibility is being wound back. For farming families, there is good news. Farm income distributed through a family trust is protected under the new rules - it is exempt from the 30% minimum tax. If your trust runs primarily on farm income, the impact on your situation is likely to be much smaller than the broader coverage suggests. Where it gets trickier is if your trust holds other income alongside the farm. A rental property, some shares, or other investments sitting inside the same trust are not protected. Those distributions will face the 30% minimum starting in 2028, even if farm income is fine. So the question worth asking your accountant is a straightforward one: what is actually inside my trust, and which parts are covered by the farming exemption? If it is all farm income, you are largely in good shape. If there is a mix, you may have some decisions to make, and it is better to understand this now than when the deadline approaches. Rollover relief is available from 1 July 2027 for those who want to restructure, but it requires planning, especially where farmland is involved. Start the conversation well before the window closes. IMPORTANT: NOTHING IS LAW YET None of these changes have been legislated. They are budget announcements, and the detailed implementation guidance most accountants need to give precise advice is still to come. MBC's position is clear: don't rush. Making major structural decisions - selling assets, unwinding trusts, changing investment holdings - before the legislation is confirmed and the details are understood is premature and potentially costly. The right move is to understand your current position, have an early conversation with your accountant, and be ready to act once the picture is clearer. What MBC want to avoid is clients making reactive decisions based on incomplete information. The planning window is open. The deadline pressure is not as immediate as some coverage suggests. - - - - - These changes will land differently for different people depending on their structure, their assets, and where they are in their business or farming life. There is no one-size-fits-all answer. What MBC want people to take away: don't wait to have the conversation, but don't rush to make decisions either. The rules that currently work in your favour are still available - some of them just have a time limit on them now. Getting advice early means more options, not fewer.
