What is in the Allegra Spender tax plan?

It cuts every personal tax bracket by 2.5 percentage points and funds the gap by reducing the capital gains tax discount, tightening negative gearing rules, and setting a 27.5% minimum on trust and investment income. The first-year income tax reduction is about A$28 billion, according to reports.

How would the capital gains tax changes work?

The plan reduces the discount applied to gains on eligible assets. A lower discount lifts effective tax on profits when you sell. That could encourage longer holding periods and more careful timing of disposals. Exact discount levels and phase-in dates matter for after-tax returns and should be watched closely.

What does the negative gearing reform mean for property investors?

Tighter rules would make it harder to offset rental losses against other income. Investors may focus on neutrally or positively geared properties and seek higher gross yields to compensate. This could slow investor-driven price gains and reshape rental supply, with effects differing by city, price point, and asset quality.

How does the 27.5% family trust tax floor work?

The proposal sets a minimum tax rate of 27.5% on trust and investment income, reducing the benefit of streaming to low-rate beneficiaries. Structures with heavy reliance on distributions may face higher effective tax. Details on thresholds, exclusions, and small business treatment will determine the real-world impact.

Could this affect ASX-listed REITs?

Yes. If trust income faces higher effective tax for local holders, near-term sentiment could weaken. We would prefer REITs with lower gearing, longer lease terms, and inflation-linked rent escalators. Any future rate cuts could offset pressure by improving cap rates and funding costs, but details and timing matter.

Global Market Insights

March 12: Allegra Spender Plan Cuts Income Tax, Lifts CGT, Trusts

ByHuzaifa Zahoor March 12, 2026March 12, 2026

The Allegra Spender tax plan proposes cutting every personal income tax bracket by 2.5 percentage points, worth about A$28 billion less income tax in year one. To fund it, the plan reduces the capital gains tax discount, tightens negative gearing reform settings, and sets a 27.5% minimum tax on trust and investment income. With the Treasurer weighing similar steps for the 12 May budget, we assess how these changes could affect household cash flow, property investors, trusts, and market sentiment across Australia.