Federal Budget 2026-2027: funds snapshot

The main impact for managed funds from the Federal Budget is the change relating to the Capital Gains Tax (CGT) regime that will end the 50 per cent CGT discount for individual and trust investors for gains on disposals of CGT assets made from 1 July 2027 (whether fund assets or investors redeeming their units), to be replaced with a new cost base indexation regime and provided a minimum 30 per cent tax is paid on the capital gain. The CGT discount for superannuation funds appears to be unaffected by this announcement.

It seems that residential funds (including build to rent) will be eligible to retain the 50 per cent CGT concession as part of the Government’s policy objective of encouraging investment in new housing stock, creating a tax advantage for these types of funds.

Trustees and managers will also need to consider whether they need to update tax disclosures in their PDS and IM documentation to account for these changes.   

While changes were announced to limit negative gearing in respect of residential property to new builds, these changes won’t affect widely held property funds or build-to-rent arrangements.