Winners and Losers from the 2026 Australian Federal Budget
The Budget directs more support toward workers, first-home buyers, small businesses, healthcare, aged care, and regional communities. At the same time, it reduces tax advantages for established property investors, discretionary trust users, foreign property buyers, and some private health insurance members. The overall focus is on housing supply, services, and economic productivity.
On this page:
Introduction
The 2026–27 Federal Budget introduces some of the biggest tax and policy changes seen in recent years. The Government says the goal is to improve housing affordability, strengthen essential services, support workers, and encourage investment in areas that boost economic growth.
To fund these priorities, several existing tax concessions and incentives are being reduced or redirected. So, who comes out ahead, and who could be worse off?
Winners from the 2026 Federal Budget
Working Australians
Workers are among the biggest beneficiaries of the Budget. From 1 July 2027, eligible taxpayers will receive the new Working Australians Tax Offset (WATO), worth up to $250 per year. The Government says this will effectively lift the tax-free threshold to almost $20,000 for many taxpayers.
Workers will also benefit from a new $1,000 instant deduction for work-related expenses from the 2026–27 financial year. Eligible taxpayers will be able to claim the deduction without keeping receipts.
First-Home Buyers
The Budget contains several measures aimed at reducing competition from investors and helping more Australians buy a home.
Key initiatives include:
Changes to negative gearing and capital gains tax concessions for future investors
Continued access to the 5% Deposit Scheme
Ongoing support through the Help to Buy shared-equity program
Funding arrangements designed to support the delivery of 100,000 new homes
The Government estimates these measures could help an additional 75,000 Australians become owner-occupiers over the next decade.
Small Businesses and Start-Ups
Small business owners receive greater certainty under the Budget.
Measures include:
A permanent $20,000 Instant Asset Write-Off for eligible businesses with turnover under $10 million
A new loss carry-back refund system for eligible companies
Expanded support for innovation and business investment
These changes may improve cash flow and make it easier for businesses to invest in equipment, technology, and growth.
Retirees Receiving Public Support
Several Budget measures provide additional support for retirees.
These include:
Increased social security spending through pension indexation
Reduced Pharmaceutical Benefits Scheme (PBS) co-payments
Free personal care services under the Support at Home program
Additional funding for home care and aged care services
The Government is also investing heavily in aged care infrastructure and workforce improvements.
Women and Care Workers
The Budget continues funding for pay increases across aged care and childcare.
Additional support includes:
Women's health initiatives
Funding for cervical cancer treatments and prevention programs
Improvements to the Child Support Scheme
Ongoing support for sectors where women make up the majority of the workforce
Regional Communities
Regional Australia receives funding for housing-enabling infrastructure.
A new $2 billion Local Infrastructure Fund will help deliver:
Water infrastructure
Roads
Sewerage connections
Power services
The Government expects this funding to help unlock up to 65,000 new homes in growing regional areas.
Losers from the 2026 Federal Budget
Investors Buying Established Residential Property
The Budget substantially changes the tax treatment of established residential investment properties purchased after 12 May 2026.
From 1 July 2027:
Rental losses on these properties can no longer be deducted against salary or business income
Losses can only be offset against property income or future capital gains
This reduces one of the key tax advantages that previously supported negatively geared property investment.
Importantly, existing property owners remain grandfathered under the current rules.
Users of Discretionary Trusts
Families and business owners who use discretionary trusts for income distribution may face higher tax outcomes.
From 1 July 2028:
A 30% minimum tax will apply to discretionary trust income
The tax will be paid by the trustee
Income-splitting strategies that produce tax rates below 30% will largely disappear
The Government has provided a three-year restructuring window from July 2027 to help trust owners review their options.
Older Australians Receiving Higher Private Health Insurance Rebates
From 1 April 2027, the age-based uplift for the Private Health Insurance Rebate will be removed.
As a result:
Some retirees may pay more for private health cover
Older Australians will receive the same rebate structure as younger policyholders
The Government expects savings from this change to be redirected into aged care services.
Consultants and Government Contractors
The Federal Government plans to reduce spending on external consultants, contractors, travel, and other non-wage expenses.
Budget papers forecast billions of dollars in savings from these measures over coming years.
Businesses that rely heavily on government consulting contracts may face reduced opportunities.
Large Clean Energy Programs
Several clean energy initiatives have had uncommitted funding reduced or redirected.
Programs affected include:
Battery manufacturing initiatives
Hydrogen industry programs
Solar industry support measures
While funding remains available in some areas, the overall allocation has been reduced compared with previous plans.
Foreign Buyers of Established Homes
The existing ban on foreign purchases of established residential property has been extended until 30 June 2029.
The Government says this is intended to keep more housing stock available for Australian buyers.
NDIS Participants
The Budget includes further reforms designed to slow growth in NDIS costs.
These measures include:
Tighter eligibility assessments
Standardised assessment processes
Changes to some support budgets
While the Government says these reforms are designed to improve long-term sustainability, some participants may experience less flexibility than under previous arrangements.
Final Thoughts
The Budget does not affect everyone equally. A worker may benefit from new tax offsets and deductions. A retiree may receive cheaper healthcare and aged care support. A first-home buyer may face less competition from investors. At the same time, property investors, trust users, and some retirees may need to rethink existing strategies.
The key question is not whether the Budget has winners and losers. It is whether the changes create opportunities or risks for your personal circumstances.
The 2026 Budget introduces changes that could affect your tax position, investment strategy, retirement plans, business structure, and estate planning arrangements over the next few years.
If you would like advice for your situation, book a free 15-minute call with James Hayes. He can help you understand how the proposed reforms may affect your finances and identify steps to take before the new rules commence.