Federal Budget 2026-27 What Construction Business Owners Need To Know

If your business turns over less than $10 million, yes. The $20,000 instant asset write-off is now permanent from 1 July 2026. 

What this means in practice: if you buy a piece of equipment, a tool, a vehicle or plant that costs less than $20,000, you can write the full cost off your tax return in the year you buy it, rather than depreciating it slowly over several years. That gives you the tax benefit immediately. 

The important word here is permanent. Until now, this rule has been renewed year to year, which made it hard to plan around. You can now factor it into your purchasing decisions with confidence. 

One thing to know: the $20,000 threshold is per asset, not a total. So you could buy three $18,000 items and write off all three. But a single item costing $20,000 or more does not qualify and goes into the depreciation pool instead. If you are planning a larger purchase, it is worth structuring it with that threshold in mind.

Yes, if your business operates as a company with global turnover under $1 billion. 

Here is the simple version: if your company paid tax in a profitable year, and then made a loss the following year or two, you can now apply that loss against the tax you already paid and claim some of it back. It works backwards. 

For construction businesses, where one good project year can be followed by a slow patch, this is a genuine cash flow tool. It is available from 1 July 2026. 

Talk to your accountant about whether your structure qualifies and what the refund calculation would look like in your situation. 

It depends on how you are currently using your trust, and who receives distributions from it. 

Quick definition, a discretionary trust lets the trustee decide each year who in the family group receives income from the business, and how much. The traditional tax benefit allows you to direct income to family members who are on lower tax rates, which lowers the overall family tax bill. 

From 1 July 2028, a minimum 30 per cent tax will apply to all income flowing through a discretionary trust. Beneficiaries get a credit for that tax against their own personal tax liability. But if a beneficiary is on a tax rate below 30 per cent, the credit is higher than what they owe and the excess is lost. You cannot get it back. 

In plain terms: if you have been distributing income to a spouse, adult children or retired parents who are on low incomes, that tax strategy largely stops working. 

If your beneficiaries already pay 30 per cent or more in tax, the change may have little practical effect on you. The tax is collected at the trust level rather than the beneficiary level, but the total tax paid is similar. 

If you use a bucket company (a corporate beneficiary) to park trust income and defer tax, that strategy also becomes significantly less attractive under the new rules. 

The Government is providing a three-year restructure window from 1 July 2027 to 30 June 2030. During that window, you can move assets out of a discretionary trust and into a different structure, such as a company or fixed trust, without triggering the capital gains tax and stamp duty that would normally apply. That is worth understanding now, not in 2027. 

Yes, and the timing matters. 

Here is the simple version of how CGT (capital gains tax) currently works: if you sell an asset you have owned for more than 12 months, you only pay tax on half the profit. This is called the 50 per cent CGT discount. It has been in place since 1999. 

From 1 July 2027, that discount is replaced. Instead, the original cost of your asset is adjusted for inflation, and a minimum 30 per cent tax applies to whatever profit remains after that adjustment. 

Whether you end up better or worse off under the new system depends on how long you have held the asset and what inflation has done during that time. Long-held assets through high-inflation periods may fare similarly under the new rules. Recent purchases through lower inflation periods will generally be worse off. 

One important clarification: the new rules only apply to gains that build up after 1 July 2027. For assets you already hold, the gain is split: the portion that has built up to 30 June 2027 still gets the 50 per cent discount. Only the gain that builds up after that date is subject to the new system. That softens the impact but does not remove it. 

If you are thinking about selling land holdings, investment property or your business in the next few years, 30 June 2027 is the most important date to have in your planning. Talk to your accountant now about whether bringing a sale forward makes sense for your specific situation. 

One thing that is not changing: the small business CGT concessions. The 15-year exemption, the retirement exemption and the rollover remain in place. If your business qualifies, those concessions are still powerful tools. 

It depends on when you bought the property and whether it is a new build or an established property. 

First, a plain-English reminder of what negative gearing is: it is when your investment property costs more to run each year than it earns in rent. That shortfall is currently a tax deduction, reducing your taxable income from other sources like your salary or business profit. 

From 1 July 2027, that deduction is being restricted for established residential properties. Here is how it breaks down by timing: 

1. If you owned the property, or had a signed contract, before 7:30pm AEST on 12 May 2026: nothing changes. You are fully grandfathered for as long as you own it. 
2. If you settled on an established property between 12 May 2026 and 30 June 2027: you are in a transitional window. You can still deduct losses against all your income until 30 June 2027. After that, losses can only offset residential property income, with any excess carried forward. 
3. If you buy an established property from 1 July 2027 onwards: losses can only ever be used against residential property income, not wages or other income. 
4. If you buy a new build, at any time: the existing rules apply in full. You can still offset losses against all your income. 

This is worth understanding clearly, because it changes how you talk to your investor clients and how you position your projects. 

Properties that qualify as new builds and keep the full negative gearing benefit include: 

1. Residential construction on previously vacant land 
2. Off-the-plan apartments and house-and-land packages 
3. Knock-down rebuilds, but only where the rebuild results in a net increase in dwellings (for example, replacing one house with a duplex qualifies; replacing a house with another house does not) 

One important limitation to know: new-build status only lasts once. If a newly built property has been lived in for more than 12 months before being sold to an investor, it loses its new-build status. That means the second or third investor buyer of a previously occupied new build may not get the exemption. 

For your business, the practical takeaway is that product built on vacant land or as a qualifying knock-down rebuild, sold directly to investors off-the-plan or within 12 months of completion, sits in a structurally better position than established stock. That is a real marketing and positioning advantage worth understanding.

Yes, and it is deliberate. 

By keeping full negative gearing for new builds while restricting it for established properties, the Government is making new construction more attractive for investors. Over time, that should shift investor demand away from buying existing homes and toward funding new ones. 

How quickly that plays out in practice depends on interest rates, investor confidence, and how the other changes (CGT reform and trust changes) affect investor behaviour more broadly. But the direction of the policy is clear. 

It is paired with the $2 billion enabling infrastructure fund aimed at unlocking new housing supply, so the Government is pushing on the demand side and the supply side at the same time. 

For residential builders in the small-to-medium range, this is a pipeline positive. It is worth talking to your advisor about how your current project mix and investor marketing might evolve to take advantage of it. 

Possibly, and it is worth keeping an eye on. 

The Australian Apprenticeships Incentive System is being restructured from 1 January 2027. Funding is being redirected toward small and medium employers and Group Training Organisations. This is not new money, it is existing support being reallocated. 

The detail that matters most is which trades end up on the priority occupations list. That list determines which apprentice incentive payments stay the same, change in structure, or reduce. That detail is still subject to consultation, which has not yet opened. When it does, it is worth engaging directly or through your industry body. 

For now, watch this space. It is not urgent, but it is worth being aware of. 

Probably not urgently, but here is what it means. 

PAYG (Pay As You Go) instalments are the regular tax payments your business makes throughout the year based on your expected income. Currently most businesses pay these quarterly. 

From 1 July 2027, businesses will be able to opt in to paying monthly instead, with amounts calculated automatically using formulas in your accounting software. The idea is that payments track your actual income more closely, rather than being based on last year. 

Participation is optional for most businesses. The exception is businesses with a history of non-compliance with the ATO, who will be required to move to monthly. 

For construction businesses where income can be lumpy and cash flow is already stretched, monthly PAYG instalments are unlikely to be attractive unless your current quarterly payments are consistently out of step with your actual trading. Your accountant can model whether opting in would genuinely improve your cash position. 

A few things are worth acting on now rather than waiting. 

• Review your trust structure. If you use a discretionary trust and rely on distributing income to lower-taxed family members, the 1 July 2028 start date feels distant but the restructuring window opens 1 July 2027. Working through the options takes time, and some asset transfers have their own lead times. Start the conversation now. 
• Model your CGT position. If you have land holdings, investment property or business you are likely to sell in the next few years, the 30 June 2027 deadline is the single most important tax planning date in a generation. Get your accountant to model what the difference looks like between selling before and after that date. Read more on these changes here.
• Check any property contracts. If you have a signed contract for an established residential property that was in place before 7:30pm AEST on 12 May 2026, confirm with your conveyancer that you are properly grandfathered. If you signed after Budget night but settled before 1 July 2027, make sure you understand what changes to your deductibility from that date. 
• Do not wait for certainty. Several of these measures are announced policy, not yet legislated. But waiting for the legislation to be finalised before starting to plan is how you run out of time. If you would like to work through what any of this means for your structure, your investments and your business plans, get in touch with the Xact team.