The Budget That Changed Everything, And What Nobody Is Telling You
Let me be direct with you.
The 2026 Federal Budget bill has now passed the lower house of Parliament, 94 votes to 48. The Senate is next, and that battle is far from over. But what most Australians still do not understand is what has already changed, what is still being decided, and what the banks have been quietly doing in the background while everyone was watching the headlines.
This is one of the most significant overhauls of Australia's tax system in nearly 30 years. Tax lawyers, economists, accountants and financial advisers across the country have said the same thing. This is not a normal budget cycle. This is a structural reset that will affect almost every Australian who is trying to build wealth outside of their salary.
So let me break it down plainly.
What Was Announced on Budget Night
The centerpiece of the Budget is the removal of the 50% capital gains tax (CGT) discount, which has been in place since 1999. From 1 July 2027, that discount is replaced with an inflation-based indexation model and a new 30% minimum tax on capital gains. This applies to property, shares, managed funds, business assets and family trusts, not just investment properties as many people assume.
On top of that, negative gearing on established residential properties purchased after 7:30pm on 12 May 2026 will be quarantined from 1 July 2027. That means rental losses can no longer be offset against your salary. And from 2028, discretionary trusts face a new 30% minimum tax on income distributions, affecting over 900,000 family trusts in Australia.
What Has Passed and Why the Senate Matters
The bill passed the lower house 94 votes to 48. Opposition members called out "shame" as the result was declared.
The Senate is a harder battle. The government does not hold a majority there. Labor needs the Greens or crossbenchers to get this across the line before Parliament rises for its winter recess. Here is the detail that almost nobody is talking about. The Greens are likely to support the bill, but they are pushing for something even more significant. They want grandfathering provisions removed. That means existing investors, who are currently fully protected from these changes, could lose that protection. Including, notably, the Prime Minister himself.
The Elephant in the Room
As reported by the Daily Mail Australia, the Prime Minister built his property portfolio, including a $4.3 million clifftop property on the NSW Central Coast, using the very tax concessions he has now removed for future buyers. He has since admitted to using negative gearing in the past. Under the current bill, he and every other existing investor are grandfathered and fully protected. Future buyers are not.
The Greens want to change that. Watch this space.
What This Means for Wealth Building
If these laws pass in their current form, Australians are going to have to work considerably harder to build wealth for retirement. Whatever you earn, the government will take a larger share of what you make on the way out. The era of tax-assisted wealth accumulation through property and shares is being deliberately wound back.
For anyone aiming to be self-funded in retirement, your investments need to do more of the heavy lifting. Property is still a tool. It is just no longer the same tool it was six weeks ago. Every Australian, whether you own one property or ten, whether you have a family trust or a share portfolio, will need to think more carefully about how their investments are structured and what the exit looks like.
The property market has softened following the announcement. How low, and for how long, nobody can say with certainty. But a softer market creates genuine buying opportunities for people who move with clear strategy rather than emotion. Waiting and watching is a choice. Complaining about the situation and doing nothing is the worst of all options.
What the Banks Are Doing and Why This Matters Right Now
Here is what I am watching in real time that very few people are talking about publicly.
After budget night, the banks went very quiet. Unusually quiet. In the days immediately following the announcement, even we as mortgage brokers did not know exactly what lenders were doing in the background to their serviceability calculators. There was no communication from the banks to brokers. No formal announcements. Nothing.
What has since become clear is that lenders are already making changes, gradually, quietly, and differently from bank to bank. Some are treating established investment properties purchased post-budget differently in their serviceability assessments. Some are adjusting how they calculate rental income offsets. All of this is happening before the laws have even passed the Senate.
Deals already in the pipeline are being caught. Pre-approvals issued weeks ago may no longer reflect what a lender will actually approve today. There will be a lot more issues to come. If you have a pre-approval, or you are mid-transaction on an investment property, this is not theoretical. It is happening right now.
Where Does This Leave You?
Every person's situation is different. Whether you already own investment properties, are thinking about buying, are approaching retirement, run a business through a trust, or are simply trying to figure out how this affects your long-term plans, the impact depends entirely on your specific circumstances.
This is not the time to rely on generic information or wait for things to settle. The Senate vote and any Greens amendments could change the picture further in the weeks ahead.
What I can do is have a real conversation with you about the lending side of things. What does your borrowing capacity look like right now? Does your current loan structure still make sense? Do you need to recalculate before your next move?
These are the conversations I am having right now with my clients. I am more than happy to assist with your lending questions.
Please note that nothing in this post constitutes financial, credit or legal advice. For investment, tax or retirement strategy, please speak with your accountant or financial adviser. I am more than happy to direct you to the right professionals.
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Louise Chiu
Mortgage Broker, Loan Lounge
Founder, Mom's Got Millions
