Australian Tax Changes 2026–27: What Individual Taxpayers and Property Investors Need to Know

There have been a lot of changes to the Australian tax system since the 2026 Federal Budget, and with different measures starting at different times, it can be difficult to keep track of what has already changed, what is coming and what actually affects you.

For individual taxpayers, some of these changes are relatively straightforward, such as lower personal tax rates and a higher cents-per-kilometre deduction. Others are much more significant, particularly the changes to negative gearing, the 50% CGT discount and electric vehicle tax concessions.

So, we decided to bring the key changes together in one place.

Whether you are an employee, property investor or simply trying to understand what you can claim at tax time, this article covers some of the most important tax changes you should know about for 2026–27 and beyond.

By the end of the article, hopefully you will have a clearer understanding of what you can claim, what has changed for the 2026–27 financial year, and what changes are still to come.

Personal Income Tax Rates Have Changed Again

From 1 July 2026, the tax rate applying to taxable income between $18,201 and $45,000 reduced from 16% to 15%. It is scheduled to reduce again to 14% from 1 July 2027. The other tax brackets remain unchanged.

Rates exclude the Medicare levy.

Although only the second tax bracket is changing, taxpayers earning more than $45,000 also benefit because the lower rate applies to the portion of their income between $18,201 and $45,000.

For someone earning $45,000 or more, the reduction to 15% provides a maximum tax saving of $268 in 2026–27 compared with 2025–26. When the rate falls to 14%, the combined saving increases to $536 per year from 2027–28, compared with the 2025–26 rates.

The New $1,000 Tax Deduction – Do You Still Need to Keep Receipts?

Starting in the 2026–27 financial year, eligible Australian residents earning income from work can claim a new $1,000 standard deduction for work-related expenses.

You don’t need to spend $1,000 on work-related expenses to receive the full $1,000 standard deduction, and you don’t need receipts to substantiate the standard deduction. If you’re eligible, the deduction is available even if your actual work-related expenses are less than $1,000. However, if you want to claim actual work-related deductions above $1,000, the normal record-keeping and substantiation requirements apply.

Note – This is a $1,000 tax deduction — not a $1,000 tax refund.

Claiming Actual Work Expenses Above the $1,000 Threshold

You are not limited to the $1,000 deduction.

If your actual deductible work-related expenses are more than $1,000, you can choose to claim your actual expenses instead. However, the normal substantiation and record-keeping requirements will apply.

So, if you regularly have significant work-related expenses, don’t assume that you can stop keeping receipts simply because the $1,000 standard deduction has been introduced.

There are also some deductions that sit outside the standard deduction. For example, eligible donations and union or professional association fees can generally still be claimed separately.

Another Tax Cut Is Coming – The $250 Working Australians Tax Offset

From the 2027–28 financial year, a new Working Australians Tax Offset of up to $250 will be available to eligible Australian residents who earn income from working, including ordinary salary and wages.

You generally need at least $4,000 of eligible work income to receive the full $250 offset.

The offset begins to reduce once your taxable income exceeds $100,000 and is completely phased out at $150,000.
So, broadly:

This is different from the new $1,000 standard deduction. A deduction reduces your taxable income, whereas a tax offset directly reduces the tax you have to pay.

For example, if you qualify for the full $250 offset and have sufficient tax payable, your actual tax bill can be reduced by $250.

The offset will be calculated through your tax return, so eligible taxpayers won’t need to make a separate application.

Electric Vehicles and Novated Leases – Are the Tax Benefits Changing?

There are some important changes coming to the Fringe Benefits Tax (FBT) exemption for electric vehicles. At the moment, eligible electric vehicles can qualify for a 100% FBT exemption, provided the relevant conditions are satisfied. The Government is not removing the concession altogether, but it is proposing to gradually scale it back and eventually replace the full exemption with a 25% FBT discount.
The changes are proposed to happen in stages.

Until 31 March 2027

The existing full FBT exemption continues for eligible electric vehicles.

From 1 April 2027

The price of the vehicle starts to matter. Eligible EVs costing $75,000 or less can continue to receive the full FBT exemption. However, an eligible EV costing more than $75,000, but still within the fuel-efficient Luxury Car Tax threshold, will only receive a 25% discount on the FBT otherwise payable.

From 1 April 2029

The full FBT exemption will generally come to an end for new arrangements. Eligible EVs within the fuel-efficient Luxury Car Tax threshold will instead receive the 25% FBT discount.

There is, however, an important transitional rule. If an eligible EV costs $75,000 or less and the commitment to provide the vehicle is made before 1 April 2029, it can continue to qualify for the full FBT exemption. The Government has also stated that existing leases will not be affected by the changes.

Claiming Work-Related Car Expenses? The Rate Has Increased for 2026–27

If you use your own car for work, the cents-per-kilometre rate has increased to 91 cents per kilometre from 1 July 2026, up from 88 cents for the previous two financial years. The new rate includes a temporary 2-cent uplift for the 2026–27 financial year.

Under this method, you can claim a maximum of 5,000 eligible work-related kilometres per car, per financial year. At the new rate, that means a maximum deduction of $4,550 per car if you have travelled at least 5,000 eligible kilometres.

But remember, the 91 cents already takes into account your car expenses, including fuel, registration, insurance, servicing, repairs and depreciation. You cannot claim 91 cents per kilometre and then add these expenses again on top.

You also don’t need a logbook to use the cents-per-kilometre method, but that does not mean you can simply estimate 5,000 kilometres at tax time. You still need to be able to show the ATO how you worked out your work-related kilometres, such as through diary, calendar or travel records.

And don’t forget that normal travel between home and your regular workplace is generally private travel, even if you need your car for work once you arrive.

If you travel substantially for work, it may also be worth comparing the cents-per-kilometre method with the logbook method rather than automatically assuming the simpler method gives you the best tax deduction.

Property Investors – Negative Gearing and the CGT Discount Are Changing

Two of the biggest changes for individual property investors relate to negative gearing and capital gains tax, with the new rules taking effect from 1 July 2027.

Negative Gearing

If you already owned your investment property before 7:30pm AEST on 12 May 2026, the existing negative gearing rules are grandfathered and you can continue to claim eligible rental losses against other income, such as your salary.

If you purchased an established residential property after 12 May 2026, you can continue to negatively gear it until 30 June 2027. From 1 July 2027, however, rental losses generally cannot be deducted against your salary or other non-property income. Instead, the losses can be used against residential property income or carried forward for use in future years.

Importantly, eligible new builds can continue to be negatively geared after 1 July 2027.

The 50% CGT Discount Is Also Changing

From 1 July 2027, the existing 50% CGT discount is being replaced with an inflation-based cost-base indexation system, together with a 30% minimum tax on relevant real capital gains.

The change is prospective. This means capital growth accrued up to 1 July 2027 retains access to the existing 50% CGT discount, even if the asset is sold later. The new rules apply to growth accruing from 1 July 2027 onwards.

There is an important exception for eligible new-build residential properties. Investors in these properties will be able to choose between the existing 50% CGT discount and the new indexation/minimum-tax system.

For anyone holding property, shares or other investments with significant unrealised capital gains, 1 July 2027 will become an important date for future CGT calculations and record keeping.

What Should You Do Next?

With so many tax changes starting at different times, the most important thing is to understand which changes actually apply to you and when they start.

For Employees

Review your work-related expense tracking for 2026–27 to determine whether claiming actual expenses or adopting the new $1,000 standard deduction yields the optimal tax outcome.

For Property Investors & Buyers

Evaluate contract execution dates for established property acquisitions against the 12 May 2026 grandfathering deadline and 1 July 2027 implementation date. Consider how new build exemptions may influence your long-term yield and CGT strategy.

Review Your Position With Investax

Tax legislation is changing, but your core strategy doesn’t need to be reactive. If you own investment property, hold assets with significant unrealised gains, or want to optimise your salary packaging, contact our team today to schedule a strategic tax planning session.

Book a Tax Strategic Consultation with Investax to understand how the right tax structure, planning, and long-term strategy can help you minimise tax, protect your assets, and make smarter financial decisions before costly mistakes are made. Whether you are investing in property, growing a business, or planning your next financial move, getting advice upfront can make a significant difference.

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