The 2026 Australian Budget: What Every Aussie Expat Needs to Know Right Now

If you’ve been scanning the Australian news from wherever you’re calling home – Singapore, Hong Kong, Tokyo, Bangkok – you’d be forgiven for thinking the apocalypse had arrived back in Oz. The headlines have been dramatic, the social media commentary even more so. Here’s the truth: yes, these are the most significant changes to Australian tax law in three decades. And yes, as an expat, there are things you need to act on. But the picture is more nuanced than the panic in the press, and in some areas, there are genuine opportunities hiding inside the changes.

We ran a live webinar for expats directly following the release of the 2026-27 Australian Federal Budget, and the attendance – over 300 people, tells you everything about how much this matters to the Aussie expat community.

Here’s everything we covered, distilled for you.

One thing to keep front of mind: Before we dive in, all of these changes are proposals. Draft legislation hasn’t been released yet. The devil, as we kept saying throughout the webinar, is very much in the detail. We’ll be pushing updates across our social channels the moment legislation lands. Don’t make major structural decisions until you see what’s actually written into law.

Capital Gains Tax on Property – The Big One

This is what everyone’s talking about, and for good reason.

What’s changing: From 1 July 2027, the 50% CGT discount available to Australian tax residents will be replaced by cost-base indexation (essentially, adjusting your cost base for CPI over time) plus a 30% minimum tax on net capital gains.

What does indexation actually mean in practice? For indexation to produce a better outcome than the current 50% discount on a property held for 15 years, inflation needs to average 4.7% per annum over that period. If you look at Australia’s CPI history going back to the 1980s, sustained inflation at that level is rare and typically short-lived. For the vast majority of people buying property post-1 July 2027, the new system means a higher tax bill.

Properties owned before budget night (12 May 2026) are grandfathered – the 50% discount still applies to gains accrued up to 1 July 2027. After that date, you’ll have two different calculations running side by side, which means a property valuation at 1 July 2027 is going to become essential.

For expats specifically: Non-residents lost the 50% CGT discount back on 8 May 2012 – so there’s no new loss there. But here’s the potential upside: if the draft legislation doesn’t carve out non-residents from the new indexation method, expats may be able to use indexation to reduce their taxable gains for the first time ever. That’s a genuine silver lining worth watching closely.

Negative Gearing – Changed, But Not Gone

The headlines made it sound like negative gearing was being scrapped entirely. That’s not accurate.

What’s changing from 1 July 2027? For new residential property purchases made after Budget Night, investors can only offset negative gearing losses against rental income or future capital gains from property investments. They can no longer use these losses to reduce tax on salary or other income. Any unused losses will carry forward indefinitely until investors can apply them against eligible income or gains.

Existing properties owned before 12 May 2026 are grandfathered. If you signed a contract before budget night, you keep the old treatment.

New builds, build-to-rent properties, and properties held in super funds or widely held trusts are exempt from this restriction.

For expats: Here’s something interesting that most coverage is missing. Under the new rules, losses quarantined during your non-resident years will eventually be applied against income taxed at the top marginal rate – up to 47% – when you return and the property becomes positively geared or is sold. Under the old system, those losses would have been applied in your repatriation year when your income was lower, giving you a benefit at roughly 22-23%. The new system is worse in one sense (you wait longer), but potentially much better in another (the benefit rate is higher when you do get it).

One important practical note: If you’re thinking of keeping your former home as a rental when you head overseas, make sure your loan is structured with an offset account rather than a redraw facility. These are treated very differently by the ATO, and getting it wrong means losing deductibility.

Shares, ETFs and Other Investments

The same CGT overhaul applying to property applies to all CGT assets – shares, ETFs, managed funds, and even cryptocurrency.

The good news for non-residents: Nothing has changed here. While you’re overseas and non-resident for tax purposes, you don’t pay Australian CGT on shares and ETFs. That’s still the case. This is a meaningful advantage.

The trap to watch: If you didn’t elect a “deemed disposal” when you left Australia, your pre-departure gains are still sitting in the Australian tax net. Before 1 July 2027, gains crystallised now attract the 50% discount under the current rules. After that date, the indexation regime kicks in. If you’re in this situation, it’s worth reviewing your position.

And if you are an Australian tax resident thinking about your share portfolio: from 1 July 2027, there’s effectively a new cost base set at that date. Dollar-cost averaging continues to work, but calculating your tax position will become considerably more complex – different parcels of shares will have different indexation start dates.

Superannuation – The Star of the Australian Budget for Expats

Somewhat lost in the noise around property, super actually came out of this budget looking like the most tax-effective structure available to Australians – including expats.

The key changes from Division 296:

• For balances over $3 million, an additional 15% tax applies to earnings. This must be paid personally, not from within the fund. Importantly, the government pulled back from the original proposal to tax unrealised gains – a significant win.
• Overseas pension supplement extended from six to twelve weeks for recipients travelling abroad.
• Contribution caps – Largely unchanged. Non-concessional (after-tax) contributions up to $120,000 per year are still available to non-residents.

With the minimum 30% CGT tax outside super versus 10-15% inside, the case for building super as an expat has never been stronger.

Don’t believe the myth that you can’t contribute to super as a non-resident. You can. You just need to understand the type of contribution available to you. Speak to an adviser about non-concessional options.

SMSF caution: If you have a self-managed super fund, the budget didn’t change the rules – but the existing risks around the Central Management and Control test and the Active Member test remain very real. These can cause your SMSF to lose its tax-complying status if you’re living overseas. Be careful.

Discretionary Trusts – The Sleeper Issue

This one flew under the radar in the lead-up to the budget, but it’s significant for many Aussie families.

What’s changing: A 30% minimum tax on distributions from discretionary trusts is being introduced. The trust pays 30% tax at the trust level, with that flowing through as a credit to beneficiaries. The problem? Beneficiaries who would normally pay less than 30% still effectively pay 30%, the excess doesn’t come back to them.

The testamentary trust issue is serious. A testamentary trust is one created through your will – often used to manage how assets are distributed to children or other beneficiaries over time. Here’s the inequity: assets passed directly to beneficiaries on death attract no tax at all. The same assets flowing through a testamentary trust will now be taxed at 30%. Critics have called this a “stealth death tax,” and they’re not wrong. If your will includes a testamentary trust provision, you should review it urgently.

The bucket company problem: If you distribute from a discretionary trust to a bucket company, the 30% trust tax may not generate a usable credit against the company’s 30% tax – meaning you could end up taxed twice. The detail in the legislation will be critical here.

The three-year restructure window: There’s a three-year period to restructure discretionary trusts into companies or fixed trusts without triggering a CGT event on property or other assets. This is real relief, but the flexibility of a discretionary trust – being able to stream income to whoever is on the lowest tax rate each year – will be lost if you move to a fixed structure.

What Should You Do Right Now?

Here’s a practical checklist:

1. Review your deemed disposal position If you left Australia with shares or investments and didn’t elect deemed disposal at the time, talk to an adviser about whether acting before 1 July 2027 makes sense.
2. Run a proper property analysis The case for buying Australian investment property has changed materially. Run the maths – and compare it against ETFs, which as a non-resident you can still sell CGT-free.
3. Commission a property valuation for 1 July 2027 If you own property that will straddle the change date, a formal valuation at that date will establish your grandfathered cost base. Valuers are going to be very busy – plan ahead.
4. Review your will and trust structures This should be urgent if you have a testamentary trust in your will or a family discretionary trust. Three years sounds like a long time. It isn’t.
5. Consider super contributions The tax-effectiveness of super relative to other structures has just increased significantly. Look at whether non-concessional contributions make sense for your situation.
6. Keep records of everything If you own a property or have investments, maintain detailed records of all capital costs. Your future tax position – and your accountant’s sanity – depends on it.

The Bottom Line for the Australian Federal Budget

Yes, things are changing. Yes, if you own Australian property or assets, your tax position is going to require a more careful look than it did 12 months ago. But the sky isn’t falling.

As non-residents, we’re not losing things we currently have in most areas. And in some – indexation potentially becoming available for the first time, the tax advantage of super being magnified – there are genuine reasons for optimism.

The critical thing right now is to wait for the draft legislation before making major structural changes, get proper advice that’s specific to your situation, and stay across the updates as they come through. We’ll be posting as soon as we have more detail. Follow us, reach out, book a time. That’s what we’re here for!

Australian Federal Budget References:

• Budget 2026-27 Review Webinar recordings: EMEA and APAC
• Expat Chat podcast: Episode 177 – Australian Federal Budget Wrap Up for Expats
• Expat Mortgage podcast: Episode 19 – Australian Federal Budget Recap and Episode 20 – Budget Action Plan
• Atlas Wealth Groups’ podcasts: Atlas Mortgage, Atlas Weekly Recap, Expat Chat.

Contact Us 

If managing your financial affairs across borders is starting to feel overwhelming, you’re definitely not alone. It’s a complex space, and having the right support can make all the difference. At Atlas Wealth Group, we specialise in supporting Australian expats with cross-border tax planning, superannuation, mortgages and wealth management. Contact us to arrange a consultation with a qualified adviser who specialises in Australian expat financial planning to get personalised guidance tailored to your circumstances.

 

Disclaimer: This article is intended for informational purposes only and does not constitute legal or financial advice. Individuals should consult licensed professionals when seeking guidance regarding their financial circumstances.