Capital gains tax, negative gearing changes on agenda as Treasurer Jim Chalmers prepares to flag $64 billion in savings

The budget’s tax measures are among the most significant changes in what the government is calling its most ambitious budget yet. Here’s what we already know:

Income tax deductions – Starting July 1, an income tax deduction of about $5 per week will go into effect for those earning more than $45,000. The lowest tax bracket for incomes between $18,200 and $45,000 will be reduced from 16 percent to 15 percent. This was a key promise Labor made in the 2025 election. The cut will double in the next budget, due in May 2027.

One-time tax deduction – A one-time tax cut of approximately $300 per worker is expected to be included in the budget. However, cabinet sources said that the law will be given to voters during the tax season in 2027, not this year.

capital gains tax – When Australian residents sell assets, they can reduce their capital gains bill by 50 per cent through contested capital gains tax relief if they have owned the asset for at least 12 months. The government will return to the Keating-era model created by the introduction of the rebate by the then-treasurer. In Keating’s model, assets were taxed at an inflation-adjusted rate; this meant that the tax applied only to the “real” increase in the value of the asset.

negative gear – Finance Minister Jim Chalmers looks set to shift the long-standing policy, which many see as the basis of the housing crisis, into negative gear. The policy allows investors to deduct losses on an investment, such as a rental property, from their taxable income. The changes could impose a limit on the number of properties an investor can use on a downside.

There are even more tax changes affecting family trusts, tax deductions, R&D, instant asset write-offs, and EVs. Read the full article for more details.