What is the Allegra Spender tax reform proposal?

It swaps lower wage taxes for higher taxes on investment returns. It cuts all personal income tax rates by 2.5 percentage points, funded by a 30% capital gains tax discount, tighter negative gearing, a 27.5% floor on investment and family trust income, and higher taxes on very large super balances.

How would the capital gains tax discount change?

The proposal sets the capital gains tax discount at 30%. That lowers the share of a gain that is tax‑free compared with current settings. Investors may hold assets longer, model different sale dates, offset with capital losses, or prioritise assets with stronger pre‑tax cash yields.

What does a 27.5% family trust tax floor mean?

A 27.5% minimum effective tax rate would apply to investment income distributed through family trusts. Streaming to low‑rate adult beneficiaries would deliver less benefit. Trustees should review deeds, beneficiary classes, and resolutions, and run after‑tax comparisons across trusts, companies with franking, and personal ownership.

What is negative gearing reform and who is most exposed?

Negative gearing reform would limit how property losses offset wage income. Highly leveraged landlords with large interest costs face the biggest cash flow impact. New buyers may qualify for smaller deductions in serviceability tests. Owners should stress‑test budgets and consider debt reduction, yield improvement, or longer holding periods.

Law and Government

March 12: Spender Plan Lifts CGT, Cuts Income Tax—Property, Trusts in Focus

ByDanny Kontos March 12, 2026March 12, 2026

Allegra Spender tax reform lands on March 12 with a clear swap: cut every personal income tax rate by 2.5 percentage points while lifting taxes on investment returns. Funding would come from a 30% capital gains tax discount, tighter negative gearing, a 27.5% floor on investment and family trust income, and higher taxes on large super balances. With Treasurer Jim Chalmers weighing CGT and negative gearing changes for the May 12 Budget, we assess impacts for property investors, trust users, and high‑balance super holders.