Tax time is here, and 2026 brings some genuinely meaningful changes — including a tax rate cut that puts more money in most people’s pockets, new rental property rules, tightened deduction claims, and new trust reporting requirements. Read on for a clear breakdown.
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15% Tax rate from 1 July 2026 for $18,201–$45,000 income |
$268 Annual saving from 2026–27 rate cut |
12% Super Guarantee rate — now permanent |
$32,500 New concessional super contributions cap |
— PERSONAL TAX —
The second phase of Australia’s Stage 3+ income tax cuts takes effect on 1 July 2026, meaning it applies to the 2026–27 tax year — not the current 2025–26 return you’re lodging now. From that date, the tax rate on income between $18,201 and $45,000 drops from 16% to 15%, saving every eligible taxpayer up to $268 per year.
For your 2025–26 return (lodging now), the current 16% rate still applies to that income band. The good news is there’s still plenty to plan for — and acting before 30 June 2026 can put you in the best position to benefit when the new rate kicks in.
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💡 What’s changing from 1 July 2026 (next year’s return): The tax rate on $18,201–$45,000 drops from 16% to 15% (saving up to $268/year). From 1 July 2027, it drops further to 14%. A new $1,000 instant tax deduction for work-related expenses also launches in 2026–27 — none of these apply to the current 2025–26 return. |
— KEY CHANGES —
Here’s a snapshot of the most important changes affecting individuals and small businesses this lodgement season.
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🏠 RENTAL PROPERTIES New Rental Property Ruling The ATO has released TR 2026/1, a new ruling covering rental income and deductions — including holiday homes, short-term rentals (Airbnb), and long-term tenancies. New apportionment rules and restrictions on holiday homes used personally are now in effect. |
📋 TRUSTS Trust Income Schedule Now Mandatory If you received any distributions from trusts in 2025–26, you must now complete a Trust Income Schedule 2026 and attach it to your return. This is a new requirement — leave it off and your return may be delayed or rejected. |
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📈 SUPERANNUATION Super Contributions Cap Rises The concessional (before-tax) contributions cap increases from $30,000 to $32,500 from 1 July 2026. The non-concessional cap moves to $130,000 and the general transfer balance cap indexes to $2.1 million. Plan ahead now. |
🧾 INTEREST CHARGES Interest Charges No Longer Deductible If you incur general interest charge (GIC) or shortfall interest charge (SIC) from 1 July 2025 onwards, these amounts can no longer be claimed as a tax deduction. This is a change from prior years. |
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🔍 ATO COMPLIANCE Tighter ATO Data Matching The ATO continues to expand its real-time data matching capabilities across digital platforms, rental income, share trading, and bank accounts. Claims without solid records are increasingly flagged automatically. Good record-keeping is more important than ever. |
🏗️ SMALL BUSINESS Instant Asset Write-Off Extended The $20,000 instant asset write-off threshold for small businesses has been made permanent from 1 July 2026. For 2025–26, it also continues to apply — check with us to confirm eligibility before claiming. |
— RENTAL PROPERTY ALERT —
The ATO’s new Practical Compliance Guidelines (PCG 2026/2 and PCG 2026/3) put holiday home deductions under the microscope. If your property is rented out only occasionally, or if you use it personally during the year, your ability to claim expenses is now more tightly regulated.
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⚠️ If you own a holiday home, speak to us before you lodge. The rules around apportioning expenses between personal use and rental use have changed, and overclaiming is one of the ATO’s top audit targets for 2026. Section 26-50 can deny deductions entirely for some holiday homes. |
— YOUR CHECKLIST —
To help us lodge your 2025–26 return quickly and accurately, have the following ready:
— SUPERANNUATION —
The Superannuation Guarantee (SG) rate reached 12% on 1 July 2025 and is now permanent — no further increases are legislated. Employers are required to pay 12% of ordinary time earnings into employees’ super funds each quarter.
From 1 July 2026, the concessional contributions cap rises from $30,000 to $32,500. If you’re looking to top up your super as a tax strategy before the end of this financial year (30 June 2026), the current $30,000 cap applies to your 2025–26 return. Get in touch with us now — there’s still time to act.
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Ready to Lodge? Let’s Get It Done. Our team is ready to walk you through every change and make sure you’re claiming everything you’re entitled to — and nothing you’re not. ☎ Contact North Coast Accounting Today On 9306 8888 |
Disclaimer: This article is general in nature and does not constitute financial or tax advice. Tax laws change frequently and individual circumstances vary. Please contact North Coast Accounting to discuss your specific situation before making any decisions based on this information.
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