2026/2027 FINANCIAL YEAR CHANGES & BEYOND
The higher full pension thresholds mean those receiving a part pension may now qualify for the full rate of pension and those who previously did not qualify may now be entitled to receive a part pension for the first time without any changes to their assets.
Payday Super is effective from 1 July 2026, requiring super payments to be made every payday. Employers must pay super on every payday rather than quarterly. This replaced the previous system, where super was due 28 days after the end of each quarter. Payday Super means super contributions now align with each pay cycle, giving employees faster access to their entitlements.
Tax cuts have commenced, with the $18,201 to $45,000 bracket now taxed at 15%.
Concessional (before tax) super contributions cap has risen to $32,500 p.a., up from $30,000. This cap includes employer Superannuation Guarantee contributions (12% of salary), salary sacrifice, and personal deductible contributions.
The Non-Concessional (after tax) super contributions cap has risen from $120,000 to $130,000 p.a. The three year bring forward cap has increased to $390,000.
Capital Gains Tax (CGT) discount changes – now law, effective from 1 July 2027
From 1 July 2027, the 50% CGT discount for individuals, trusts and partnerships is replaced with cost base indexation and a minimum 30% tax rate on net capital gains. The changes apply to gains accruing on and after 1 July 2027- gains that accrued before that date retain the existing 50% discount treatment under transition rules.
Key points:
- Super is exempt – superannuation funds retain the existing one-third CGT discount in the accumulation phase. No change to how super earnings are taxed within the accumulation phase. Super within the pension phase remains tax free on all capital gains, earnings and pension payments.
- Age Pension recipients are exempt from the minimum tax – income support recipients are excluded from the 30% minimum tax rate.
- New residential dwellings – investors can choose between the 50% discount or the new indexation regime for new builds.
- Small business concessions retained – the 50% active asset CGT reduction threshold rises from $2M to $10M turnover. Other small business concessions are preserved.
Negative gearing – also now law. From 1 July 2027: deductions for net rental losses on established residential properties acquired after 12 May 2026 are limited to rental income only. Grandfathering applies to properties acquired before 7:30pm AEST 12 May 2026.
SMSF borrowing – as part of the Senate deal, SMSFs will be prohibited from borrowing to fund property investments going forward.