Written by Michael Walsh, Associate Director and Founder
As we move into the 2026-27 financial year, there are several important tax, superannuation and investment updates for clients to be aware of. Some measures are already scheduled, while others remain proposed and subject to legislation.
Residential Property & Negative Gearing
Following the Federal Budget, proposed changes have been announced for residential property negative gearing.
Established residential properties acquired after 7:30pm on 12 May 2026 can still access negative gearing benefits during the 2026-27 income year. However, from 1 July 2027, losses on these properties are expected to be quarantined and carried forward to offset future positive rental income or capital gains from the sale of the property.
Properties owned before 12 May 2026, including those under contract but not yet settled, are expected to be grandfathered until sold. Existing main residences purchased before this date and later converted into rental properties are also expected to be grandfathered.
From 1 July 2027, only new-build residential properties are expected to remain eligible for negative gearing concessions. Property investors should also consider obtaining a quantity surveyor’s report to maximise depreciation and capital allowance deductions.
Proposed Instant Asset Write-Off
A proposed measure may allow eligible small businesses with turnover of up to $10 million to claim an immediate tax deduction for business assets costing less than $20,000 per item.
If legislated, this may provide an opportunity for businesses to update technology, equipment, machinery or office furniture.
Proposed Company Tax Loss Measures
From 1 July 2026, it is proposed that companies with aggregated annual turnover of less than $1 billion may be able to carry back eligible revenue tax losses and offset them against tax paid up to two years earlier.
As this measure has not yet been legislated, Walshs will continue to monitor developments and advise clients where relevant.
Payday Super: Employer Action Required
From 1 July 2026, employers will be required to pay employee superannuation contributions on each payday, rather than quarterly.
Payments will need to align with the business’ payroll cycle, whether employees are paid weekly, fortnightly or monthly. Contributions will generally need to reach the employee’s super fund within 7 business days after payday to be considered paid on time.
Employers should also prepare for July 2026, when multiple super payments may be required, including payday super contributions for July and the final quarterly payment for April-June 2026, due by 28 July 2026.
Record Keeping & Substantiation of Expenses
Good record keeping remains essential when claiming deductions, particularly for work-related expenses.
Before claiming a deduction, taxpayers should ensure:
- The expense was paid personally and was not reimbursed by an employer.
- The expense directly relates to earning assessable income.
- Appropriate records are kept to support the claim.
Records may include receipts, tax invoices, logbooks or other supporting documentation. These should generally be retained for at least five years from the date the relevant tax return is lodged.
Superannuation Updates
For the 2026-27 financial year, the concessional contributions cap is $32,500. This includes employer super guarantee, salary sacrifice and personal deductible contributions.
Clients may also be eligible to use unused concessional contribution caps from previous years if their super balance was less than $500,000 at 30 June 2026. This can be particularly useful in a high-income year or where a capital gain is expected.
The non-concessional contributions cap is $130,000, or up to $390,000 if eligible to use the bring-forward rule.
Division 296 tax may also affect members with superannuation balances above $3 million, with further tax applying to balances above $10 million. Walshs will be contacting clients who are likely to be affected.
The Government has also announced proposed changes to SMSF borrowing. Once legislated, SMSFs are expected to no longer be able to borrow to purchase residential real estate, although borrowing for business real property is expected to remain available.
Expected Capital Gains Tax Changes
Significant CGT changes are expected from 1 July 2027.
These include proposed changes to currently exempt pre-CGT assets purchased before 19 September 1985, the removal of the current 50% CGT discount, and the introduction of a CPI indexation model.
Clients may also need to obtain valuations for certain assets as at 1 July 2027, including shares, real estate, private businesses, personal-use assets over $10,000 and collectables over $500. The main residence is expected to be excluded.
Planning Ahead
With several significant changes proposed or expected, early planning will be important. Walshs will continue to monitor legislative developments and advise clients on how these updates may affect their tax, investment, superannuation and wealth planning strategies.
For tailored advice, please contact the Walshs team on 07 3221 5677 or enquiries@walshs.com.au.
