Treasurer Jim Chalmers has handed down the 2026-27 Federal Budget and this year’s announcements are heavily focused on generational inequality. From housing reforms to instant work-related tax deductions the Labor Government is positioning this budget as one designed to ease pressure on younger Australians — particularly those struggling to enter the property market.
Here’s everything you need to know about the 2026-27 Federal Budget, and how it will impact you.
Major changes to negative gearing and capital gains tax
The biggest announcement from this year’s budget is the Government’s overhaul of negative gearing and capital gains tax concessions. From July 1 2027, negative gearing will only apply to newly built homes, with the Government arguing the change will encourage more housing supply instead of investor competition on existing properties. Existing investment properties purchased before budget night will remain under the current rules.
The Government is also changing the current 50 per cent capital gains tax discount. Under the new system, tax concessions will instead be linked to inflation, alongside a new minimum 30 per cent tax on gains. Investors who purchase newly built homes will still be able to access the old 50 per cent discount or choose to use the existing concessions.
According to Treasury modelling, the reforms could help an additional 75,000 Australians buy a home over the next decade by slowing investor demand and making it easier for first-home buyers to enter the market.
Importantly, the changes are focused specifically on residential property. Other asset classes — including commercial property and shares — will continue to be taxed under existing arrangements, with no changes announced in this budget.
Tax cuts and instant deductions for workers
The budget also includes new tax relief aimed at workers facing ongoing cost of living pressure. From 2027–28, more than 13 million Australians will receive an additional annual working tax offset of up to $250, alongside a new $1,000 instant tax deduction that allows people to claim work-related expenses without needing receipts.
The Government says these measures are designed to provide immediate relief as everyday costs continue to rise.
Travel-associated costs will increase
Another smaller but notable change in the budget is an increase to the Passenger Movement Charge — often called Australia’s “departure tax”. From 1 January 2027, the fee will rise by $10 to $80 per international departure, whether travellers are leaving by air or sea, and regardless of nationality.
The charge has been in place since 1995 and is automatically included in the cost of international flights, so travellers don’t pay it separately.
Fuel security and supply
The budget also includes a major investment in Australia’s fuel security, with more than $10 billion committed to strengthening supply chains amid ongoing global instability. A key change is an increase in fuel stockholding requirements by around 10 days, lifting national reserves to about 50 days for jet fuel and diesel, and 37 days for petrol.
To support this, the Government will provide $7.5 billion in loans and equity to help companies store extra fuel, and spend $3.2 billion on a government-owned reserve holding emergency diesel and jet fuel.
At the same time, fuel prices are expected to remain high due to ongoing global energy pressures, even if international conflict eases.
Earlier this year, the Government introduced temporary relief measures — including a halving of the fuel excise (reducing petrol prices by around 23 cents per litre) and the removal of the heavy vehicle road user charge for three months — but those supports are now coming to an end. The discounts are set to expire in July, and there are no new measures in this budget to directly reduce fuel costs for drivers.
