2026 Budget: What Changes for Australian Freelancers

The 2026 federal budget dropped a lot of changes. Capital gains, negative gearing, trust distributions, a new standard deduction, permanent asset write-offs. If you're a freelancer trying to work out what this means for you, the headlines are unhelpful. Most of the coverage is written for property investors and PAYG employees, not sole traders.

Here's what the budget changes mean if you're a freelancer or sole trader in Australia. We'll cover what's changing, when it kicks in, and what (if anything) you need to do differently.

Changes that affect you now (this financial year or next)

$1,000 standard tax deduction from 1 July 2026

Starting next financial year, all taxpayers can claim a flat $1,000 in work-related expenses without keeping receipts. You choose between the $1,000 flat amount or your actual itemised work-related expenses, whichever is higher. It replaces the old $300 no-receipt threshold.

Here's the important distinction for freelancers: this covers work-related expenses in the individual section of your tax return. It does not cover business deductions claimed through the Business and Professional Items schedule, which is where most sole trader expenses go.

Your software, equipment, insurance, marketing costs, and most home office expenses are business deductions. They're claimed separately, and you still need receipts for all of them. The standard deduction doesn't change that.

Where it could help: if you also have employment income alongside your freelance work, or if you have small miscellaneous work-related expenses (a portion of your phone bill, a short course, professional memberships) that don't go through your business schedule. Previously you needed receipts for anything over $300. Now you can claim up to $1,000 without them.

For most full-time freelancers, this change is less significant than the headlines suggest. Our detailed breakdown of the standard deduction covers who it affects and what it means for record keeping.

$20,000 instant asset write-off is now permanent

The instant asset write-off has been extended and re-extended so many times that nobody was sure if it would survive another year. The budget made it permanent.

If you buy equipment for your business that costs under $20,000, you deduct the full cost in the year you buy it. No depreciation schedules, no spreading it across multiple years. A $2,500 laptop, a $1,800 camera, a $600 monitor. Claim the lot in one go.

This was already the rule for 2025-26, so nothing changes for this financial year. What changes is certainty. You can now plan equipment purchases knowing the write-off will be there next year and the year after.

If you've been putting off a purchase, buying before June 30 means the deduction counts for this financial year. Our deductions guide covers how to claim it.

16% bracket drops to 15% from 1 July 2026

The second tax bracket (income between $18,201 and $45,000) drops from 16% to 15%. It's a small change, and it only affects the portion of your income in that range.

If your taxable income is above $45,000 (which is most full-time freelancers), the saving is about $268 per year. Not nothing, but not the headline change either.

$250 Working Australians Tax Offset from 2027-28

From the 2027-28 financial year, there's a new $250 tax offset for working Australians earning up to $150,000. This includes sole traders. It's a flat $250 off your tax bill.

It doesn't kick in until 2027-28, so there's nothing to do right now. Just know it's coming.

The big investment changes (from July 2027)

These are the headline changes in the budget. They don't affect freelancers directly through their business income, but they affect how you think about where to put your money.

50% CGT discount replaced

The 50% capital gains tax discount is being replaced from 1 July 2027. This is the rule that lets you halve any capital gain on an asset you've held for more than 12 months before adding it to your taxable income.

The new system uses an inflation-based indexation method to calculate the gain, plus a 30% minimum tax on the resulting amount. The government says this is "fairer." The practical effect is that capital gains on most assets will be taxed more heavily than they are now.

Transitional rules: Capital gains that accrued before 1 July 2027 still get the old 50% discount. So if you bought shares or investment property before 2027, the gain up to that date is protected. Only the gain from July 2027 onwards falls under the new rules.

If you own investment property or shares, this matters. If you've been considering selling, the next financial year (before July 2027) is the last window for the old discount to apply to the full gain.

Negative gearing limited to new builds

From 1 July 2027, negative gearing on investment property is limited to new builds only. You can no longer negatively gear existing properties purchased after 7:30pm on 12 May 2026 (budget night).

If you already own an investment property that's negatively geared, it's grandfathered. Nothing changes for you. But if you were planning to buy an existing property as an investment, the tax math changes.

What this means for freelancers: super just got better

Here's the part that connects everything.

Super contributions are still taxed at 15%. The budget didn't change that. Meanwhile, two of the most common alternatives for building wealth outside super (investment property and shares) just became less tax-friendly.

The 50% CGT discount made investment property and shares more attractive on an after-tax basis. With the discount going to an indexation model plus a 30% minimum tax, the after-tax return on those investments drops. Negative gearing limits reduce the annual tax benefit of holding an investment property.

The gap between super and everything else just got wider.

If your income is taxed at 30% (plus Medicare), putting that money into super means it's taxed at 15% instead. That's a 17% saving per dollar. The budget didn't touch this. But it did make the tax treatment of the main alternatives worse by comparison.

If you've been thinking about making a voluntary super contribution before June 30, the argument just got stronger. The super calculator shows the exact tax saving at your income level, and our super guide for freelancers walks through the process step by step.

The deadline to contribute this financial year is effectively June 25 (BPAY takes a few days to clear). Our EOFY super deadline guide covers the timeline.

Changes for trusts and companies (less relevant to most freelancers)

30% minimum tax on discretionary trust distributions

From 1 July 2028, trust distributions to adult beneficiaries will face a 30% minimum tax rate. This is aimed at trusts that distribute income to family members in lower tax brackets to reduce the overall tax bill.

If you operate as a sole trader (which most freelancers do), this doesn't affect you. If you operate through a family trust that distributes income to your spouse or adult children, this is a significant change. Talk to your accountant.

Government contractor spending cuts

The budget flagged major cuts to government consulting and contractor spending. If you do contract work for government departments, this could reduce the available work. The details are still being worked out by individual departments, so it's a "watch this space" situation rather than a "do something now" situation.

What to do before June 30

The budget doesn't change your EOFY checklist much. The things that matter before June 30 are the same as they were a month ago:

1. Make your super contribution by June 25. The tax advantage is unchanged and the deadline is firm. If anything, the budget strengthened the case for contributing to super over other investment options. Check how much you'd save

2. Buy any equipment you've been putting off. The $20,000 instant asset write-off is now permanent, but buying before June 30 means the deduction counts for this financial year. After June 30, it counts for next year

3. Get your deductions sorted. The new $1,000 standard deduction doesn't start until 2026-27, so this year's deductions still need receipts and records. See our complete deductions list

4. Review your investment strategy. If you hold investment property or shares and you were thinking about selling, the CGT changes from July 2027 are worth understanding now, not next year

Our EOFY checklist for freelancers covers the full timeline week by week.

Frequently asked questions

Does the budget affect my 2025-26 tax return?

Not much. The $20,000 instant asset write-off was already in place for this year. The 16% to 15% bracket change and the $1,000 standard deduction both start in 2026-27. The CGT and negative gearing changes don't start until 2027. Your EOFY this year is basically unchanged.

Should I sell investment property before July 2027?

That depends on your specific situation, how long you've held the property, and what the gain looks like. The transitional rules protect gains that accrued before July 2027, so the urgency is less than the headlines suggest. But if you were already thinking about selling, it's worth running the numbers with your accountant before the new rules kick in.

Does the $1,000 standard deduction apply to sole traders?

It applies to all taxpayers, but it only covers work-related expenses in the individual section of your return, not business deductions claimed through the Business and Professional Items schedule. Most sole trader expenses (equipment, software, insurance, home office) are business deductions, so the standard deduction doesn't replace them. It's most useful for freelancers who also have employment income, or who have small work-related expenses outside their business schedule. You still need receipts for all business deductions. See our full guide to the standard deduction for freelancers.

Is there any change to the super contribution cap?

No. The concessional contribution cap remains $30,000 for 2025-26. The budget didn't change super contribution rules. If your super balance was under $500,000 at the end of last financial year, you can also use carry-forward unused caps from previous years.

What about Division 296 (the super tax on balances over $3M)?

Division 296 was already legislated before this budget. It applies an additional 15% tax on earnings from super balances above $3 million. For the vast majority of freelancers, this isn't relevant. If your super balance is approaching $3M, you should have an SMSF adviser already.

When do the trust distribution changes start?

The 30% minimum tax on discretionary trust distributions starts from 1 July 2028, with rollover relief from July 2027. If you operate through a trust, you have time to plan, but start the conversation with your accountant now rather than in 2028.