2026 Federal Budget - what should you do?

After my breakdown of the 2026–27 Federal Budget, I’ve had hundreds of messages from investors, business owners and families asking the same question:

“What should I actually do now?”

Before we jump into strategies, the most important thing to remember is this:

We are still waiting for the finer details of the actual legislation and at this stage nothing has been passed into law yet.

Right now, these are proposed measures announced in the Budget. They still need to go through Parliament and there is every chance parts of the legislation could change, be watered down or delayed before becoming law.

So while there is no need to panic, there is a need to start preparing and understanding what these changes could mean for you if they proceed.

The people who will be most affected are:

• Investors

• Small business owners

• Families using discretionary trusts

• Retirees

• Anyone planning to sell assets or businesses in the future

Here’s what I believe you should be focusing on over the next 12 months.

1. Don’t Make Emotional Decisions

I know this Budget has created fear and frustration, especially around property investing, trusts and capital gains tax.

But making rushed decisions because of headlines is rarely the right move.

We still need:

• Draft legislation

• Clarification from Treasury

• ATO guidance

• Transitional rules

• Technical details around valuation methods and exemptions

There are still too many unknowns to restructure everything tomorrow.

What you should do instead is start planning early and gathering information.

2. Review Your Asset Ownership Structure

If the proposed trust and capital gains changes proceed, the way assets are currently held may no longer be the most tax effective structure moving forward.

This does not mean discretionary trusts are dead.

But it does mean:

• Income splitting benefits may reduce

• Certain strategies may no longer work effectively

• Some structures could create significantly higher tax outcomes

  
  

For some people, this may mean reviewing:

• Trust structures

• Company structures

• Ownership between spouses

• Investment entities

• Succession planning

  
  

Please do not restructure based purely on social media advice.

Every restructure has:

• Tax implications

• Stamp duty implications

• Asset protection implications

• Borrowing implications

  
  

Proper advice matters more than ever.

3. Start Thinking About Valuations

One of the biggest practical issues from these proposed changes is valuations.

If the CGT discount changes proceed and pre-1985 assets become taxable again, many people may need market valuations as at:

• 30 June 2027

• 1 July 2027

  
  

That could include:

• Property

• Businesses

• Shares

• Crypto

  
  

My concern is that if everyone leaves this until the last minute, valuers will be overwhelmed.

So while there’s no need to rush today, this is something to keep on your radar.

4. Business Owners Need to Review Exit Plans

If you own a business and were planning to sell in the next 5–10 years, this Budget could materially impact your future tax position.

The proposed removal of the 50% CGT discount means the cost of selling a business may increase significantly.

Yes, small business CGT concessions still exist.

But eligibility for those concessions is extremely technical and many business owners assume they qualify when they actually don’t.

Now is the time to:

• Review your structure

• Review your eligibility

• Understand your future tax exposure

• Start planning well before a sale event occurs

  
  

The earlier planning starts, the more options usually exist.

5. Property Investors Should Reassess Cash Flow

If negative gearing changes proceed, investors purchasing established properties after Budget night may no longer receive the same annual tax benefits they are used to.

That means cash flow and borrowing capacity become even more important.

This may change:

• Serviceability calculations

• Investment strategies

• Holding costs

• Future property demand

For some investors, new builds may become more attractive due to the proposed exemption.

For others, the focus may shift toward:

• Higher yielding assets

• Debt reduction

• Diversification

• Long-term holding strategies

Again, there is no “one size fits all” answer.

6. Keep Good Records Moving Forward

This Budget appears to be taking us back toward a much heavier compliance environment.

That means documentation will matter more than ever.

Good record keeping around:

• Purchase prices

• Improvement costs

• Loan documentation

• Trust distributions

• Asset valuations

• Business restructuring

Is going to become increasingly important.

Unfortunately, the people who keep poor records usually end up paying the most tax.

7. Don’t Ignore the Opportunities

While there has been a lot of negativity around this Budget, there are still opportunities available.

Some businesses may benefit from:

• Permanent instant asset write-offs

• Expanded R&D concessions

• Startup loss refunds

• Lower personal tax rates

• Strategic restructuring opportunities

The people who adapt early are usually the ones who come out ahead.

Final Thoughts

This Budget has created uncertainty and frustration for many Australians, particularly investors and business owners.

But right now, we are still dealing with proposals, not law.

There is still time to:

• Plan properly

• Understand the legislation

• Review your structures

• Seek advice

• Make informed decisions rather than emotional ones

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Over the coming months, I’ll continue breaking down the legislation as more details are released because I think many Australians still don’t fully understand how significant these proposed changes could become.

For now, stay informed, stay calm and don’t make major decisions without proper advice.

Natalie Lennon

Founder & Director

Natalie@twosides.com.au

www.twosides.com.au

02 9030 0269

@twosidesaccounting Facebook & Instagram