The decisions you make before 1 July 2027 carry different tax consequences than the ones made after.
The federal budget landed quietly. Most business owners caught the fuel excise headline, maybe the housing announcement, and moved on. What did not make the front page is the change that matters most for anyone planning to sell a business or significant asset in the next decade.
If that is you, even loosely, here is what changed, who it hits, and what to do before the window closes.
Budget announcements subject to legislation. As at 14 May 2026. NVT does not provide financial or tax advice. Speak with a qualified accountant or financial adviser about your specific circumstances.
The decisions you make before 1 July 2027 carry different tax consequences than the ones made after.
The 50% CGT discount is gone. From 1 July 2027, selling a business or significant asset will cost you more in tax than it would today.
Since the Howard era, selling an asset held for more than 12 months meant you only paid tax on half your capital gain. On a $1 million gain, you paid tax on $500,000.
From 1 July 2027, that is over. The discount is replaced with cost-base indexation (your gain adjusted for inflation) and a 30% minimum tax on realised gains. If your gains are already taxed at 30% or above, the minimum tax will not move the needle. For anyone accessing lower marginal rates, it will.
In practical terms: selling a business, commercial property, or significant asset will cost you more in tax than it would today.
50% CGT discount abolished from 1 July 2027
Replaced with cost-base indexation plus a 30% minimum tax on realised gains
This is not a tax on corporations. It targets individuals, sole traders, partnerships, and trust beneficiaries, which is how most Australian SMEs are structured.
If you own business assets personally, operate through a family trust, or run through a partnership, this applies to you from 1 July 2027. The after-tax outcome of an eventual sale just changed materially.
Companies are not directly affected by this change. But if gains flow from a company structure out to individual beneficiaries, those distributions can still bring individuals into scope.
Sole traders, partners, and trust beneficiaries are all in scope
Companies are NOT directly affected, but distributions to individuals may be
The date you acquired an asset now matters more than ever. Assets held before and after 12 May 2026 are treated very differently.
The government built in partial protection for existing asset holders. Gains accrued before 1 July 2027 retain the 50% discount on that portion. It is not full protection, but it is meaningful.
The harder edge is for new acquisitions. Any asset acquired after 7:30pm AEST on 12 May 2026 plays by the new rules from day one. No discount, no matter how long you hold it.
Two other points worth knowing: new residential builds are exempt, and investors can choose either regime at sale. And pre-1985 assets lose their blanket CGT exemption from 1 July 2027. If you are holding assets acquired before CGT existed, gains accrued after that date become taxable.
Assets held before 12 May 2026: gains to 1 July 2027 retain the 50% discount
New assets after 7:30pm AEST on 12 May 2026: new rules from day one
New residential builds: choice of old or new regime at sale
Pre-1985 assets: blanket exemption ends 1 July 2027
Exit planning is not something you do the year you sell. The structural decisions that determine your CGT position are made years before settlement.
The founders who come out ahead will model their exit under the new rules now and make structural adjustments while there is still time. Those who wait will be adapting to rules that have already locked in.
Structural decisions before July 2027 operate under more favourable conditions
Exit timeline, asset structure, and distribution strategy should all be reviewed now
The CGT change does not sit alone. The 30% minimum tax on discretionary trusts follows in July 2028. The direction across all these measures is the same: asset holders pay more.
Negative gearing restrictions on established residential properties come in from the same date as the CGT changes. The operating environment for Australian SME owners is shifting on multiple fronts at once.
The businesses that navigate this well will not just be the fastest growing ones. They will be the ones running the leanest, protecting margins most effectively, and making smart structural calls before the rules fully lock in.
CGT, trust reform, and negative gearing restrictions are all moving in the same direction
Running lean now is a direct competitive and tax advantage at exit
Not sure if your operations are as lean as they should be? Find out in 3 minutes.
Get your free Business Health ScoreYou do not need an exit planned for next year to act on this. You just need to make sure the decisions you are making now are not building an avoidable tax problem later.
Map how you hold your assets.
Sole trader, discretionary trust, or partnership: your structure determines your exposure. If you cannot answer this clearly, start here.
Review your exit timeline with your accountant.
Not 'do I need to sell now' but 'does my current structure set me up well under the new rules when I do.' That conversation is worth having before 2027, not at settlement.
Tighten your operational cost base.
The businesses that maximise after-tax proceeds at exit are the ones running the tightest operations going in. Staffing, overhead, team structure: all of it shows up in your numbers at sale.
The businesses that win in this environment run the leanest and make smart structural decisions early.
The budget delivered this quietly. Most business owners still have not read past the headlines, and that gap is where avoidable tax problems get built in.
The ones who come out ahead will be the ones who reviewed their position early, made the right structural calls while time was still on their side, and built lean enough operations to protect their margins at exit.
NVT helps Australian SMEs build efficient, right-sized teams that scale without excess cost.
Sources
budget.gov.au · pm.gov.au · smallbusiness.nsw.gov.au · perpetual.com.au · commbank.com.au
Budget announcements subject to legislation. As at 14 May 2026. NVT does not provide financial or tax advice. Consult a qualified adviser for guidance specific to your circumstances.
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