Parliament has now passed one of the most significant pieces of tax legislation in years, and if you run a business or sit in the finance seat, it pays to understand it properly rather than through the headlines. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 cleared both houses on 25 June, comfortably through the lower house by 98 votes to 39. It rewrites four taxation laws at once, touching capital gains tax, negative gearing, personal income tax, small business concessions and the way self-managed super funds can borrow. There is a lot in it, and a fair amount of noise around it, so we want to cut through to the parts that actually change the decisions you will make over the next 12 to 18 months.
The most useful way to read this package is by date. There are two commencement points, and the gap between them is where your planning sits.
Two dates to circle
From 1 July 2026, three measures take effect. Personal income tax cuts come in, alongside a new $1,000 standard deduction for work-related expenses available to Australian tax residents who earn labour income. The changes to the instant asset write-off also land on this date. None of these are dramatic on their own, but together they shift the maths on take-home pay and on how you time deductible purchases this financial year.
From 1 July 2027, the heavier structural changes begin. This is when the capital gains tax overhaul, the negative gearing restrictions and the Working Australians Tax Offset commence. That 12-month runway is deliberate, and it is the single most important thing for business owners to grasp. You have a window to plan around the new CGT settings rather than be caught flat-footed by them.
The CGT change that reshapes exit planning
This is the one we have had the most calls about. For capital gains accruing on and after 1 July 2027, the 50 per cent CGT discount for individuals, trusts and partnerships is being replaced with cost base indexation and a minimum tax rate of 30 per cent on the gain. In plain terms, the long-standing rule that halved the taxable gain on assets held more than a year is going, and a different mechanism takes its place.
For anyone contemplating the sale of a business, a commercial premises or an investment asset, the timing of that decision now carries real weight. We are not in the business of telling you to rush a sale, and a transaction driven purely by tax rarely ends well. But the change does mean that the assumptions underpinning a five-year exit plan need revisiting, because the after-tax proceeds on a sale settled after the commencement date may look materially different to one settled before it. The shift from a flat discount to indexation also changes how inflation and holding period feed into the final number, which is a more nuanced calculation than the old halving rule and one worth modelling properly rather than estimating in your head.
There is good news buried in the detail for smaller operators. Alongside the main bill, the turnover threshold for the small business 50 per cent active asset CGT concession is being lifted from $2 million to $10 million. That is a substantial widening of eligibility, and it brings a large number of growing businesses that had outgrown the old threshold back into concession territory. If your turnover sits in that $2 million to $10 million band, this is worth a proper conversation, because it can change the entire complexion of an eventual sale. A separate Innovative Business CGT Concession has also been flagged to preserve the existing 50 per cent relief for genuine start-ups, and a second, more technical bill dealing with discretionary trusts is expected later in the year. Until that lands, trust structures carry a degree of uncertainty, and we would caution against locking in any major restructure before the detail is known.
Instant asset write-off and your capital spending
The instant asset write-off changes taking effect from 1 July 2026 deserve attention from any business weighing up equipment, vehicles or plant. The write-off lets eligible businesses claim an immediate deduction for qualifying assets rather than depreciating them over years, which can meaningfully improve a cash position in the year of purchase. Where it gets interesting is the interaction with finance. Acquiring an asset through a chattel mortgage or equipment loan can still allow you to claim the deduction while spreading the cash outlay, so you are not forced to choose between the tax benefit and preserving working capital. Getting that structure right, and timing the purchase against the financial year, is exactly the kind of decision worth running past us before you sign.
Negative gearing moves to new builds
From 1 July 2027, negative gearing on residential property investment will be limited to new builds. Existing arrangements are grandfathered, but the change reshapes the calculus for anyone planning to add established residential property to their portfolio with borrowed funds. For business owners who have used property investment as part of their broader wealth strategy, this is a prompt to review how leverage is deployed and whether the after-tax case still stacks up under the new rules. We would also note that the grandfathering for jointly owned assets had a gap around inheritance and divorce, affecting an estimated 680,000 properties, and the government has committed to fixing this so-called widow’s tax issue in a second tranche of legislation later in the year. Worth watching if you co-own.
SMSF borrowing: the commercial door stays open
The change that has caused the most disruption in our world is the ban on new limited recourse borrowing arrangements for residential property held inside a self-managed super fund. New residential SMSF loans under an LRBA structure will be blocked 45 days after the legislation receives Royal Assent. Existing facilities and contracts already in train are grandfathered, and refinancing that maintains a pre-commencement borrowing is also protected, so funds already holding residential property are not affected.
Here is the part that matters most for business owners and has had far too little attention. Commercial property is untouched. An SMSF can still use an LRBA to acquire business real property, which includes the industrial shed, retail tenancy or office suite many of you operate from. For owners who have been considering moving their business premises into their super fund and borrowing to do it, that pathway remains fully open. It is a genuinely useful structure for the right business, allowing the fund to own the premises while the operating entity pays rent, though it needs to be set up correctly and is not suited to everyone. Borrowing inside super is detailed territory, and the compliance bar is high, so it should only be approached with proper licensed advice.
What this means for your debt structure
Step back from the individual measures and a clear theme emerges. The next two years contain a series of timing decisions, and timing is where good advice earns its keep. One underrated benefit of the bill finally passing is certainty itself. Businesses had been deferring decisions while the rules were in flux, and uncertainty is its own kind of cost when it stalls investment and freezes expansion plans. With the framework now legislated, you can plan against known parameters rather than a moving target, even if some of the finer detail in trusts and shared ownership is still to come. If you are carrying business debt, the current rate environment and the broader certainty that comes from this legislation finally passing make it a sensible moment to review your facilities. Refinancing into a sharper rate, restructuring to free up working capital, or locking in finance for an expansion you had been deferring all look different now that the policy fog has lifted a little.
For those weighing a major asset purchase, the 1 July 2026 write-off changes reward getting your finance organised early rather than scrambling at year end. For those with a sale or generational handover on the horizon, the 1 July 2027 CGT changes mean exit planning should start now, not in 2027. And for anyone holding their premises in, or considering, an SMSF structure, the commercial borrowing door remains open while the residential one is closing.
