Govt delivers expected CGT hit

Mike Taylor

Managing Editor and Publisher

12 May 2026

As predicted, there was little in the Budget for financial advisers beyond the work which will be required to help clients navigate the capital gains tax (CGT) changes.

The government will scrap the capital gains tax exemption for assets held before 1985, and introduce a minimum CGT rate of 30% to discourage people holding on to property in retirement. This alone, will lift the activity levels of most financial advisers.

The Treasurer, Jim Chalmers brushed off the pleas of the financial services industry by noting that Budget is delivery a reduction in red tape.

He said the Government “is reducing financial sector compliance costs by $780 million a year by progressing 14 legislative reforms, including increasing company reporting thresholds”.

“Financial regulators are also taking 13 actions to streamline their data collections to reduce compliance costs,” he said..

“We will regularly introduce regulatory reform bills to improve and modernise regulation, building on the 60 measures legislated in 2025,”

More broadly, Chalmers outlined the following under the heading of incentivising investment and innovation.

• Permanently introducing two‑year loss carry back for companies up to $1 billion in turnover from 1 July 2026 to support resilience, investment and sensible risk taking by Australian firms.
• Introducing loss refundability for start‑ups from 1 July 2028, to help new businesses invest and grow in their first two years. Refundability will be capped at the amount of fringe benefits tax and withholding tax paid on employees’ wages. This provides a tax refund for startups before they are profitable.
• Expanding tax incentives for venture capital from 1 July 2027, to encourage more investment in new and innovative firms. This unlocks investment for these firms that find it hard to access traditional finance, despite usually having high productivity and creating new jobs.
• Better targeting the Research and Development Tax Incentive from 1 July 2028 which will unlock $400 million in additional research and development by young firms per year.
• Making the $20,000 small business instant asset write‑off permanent, to support small businesses to invest and keep compliance costs low.

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