Australian Equity Strategy "Federal Budget 2026-27: Positive for equitie..."

Research evidence excerpt

Australian Equity Strategy "Federal Budget 2026-27: Positive for equitie..."

Global Research

12 May 2026ab

Australian Equity Strategy Equity Strategy

AustralasiaFederal Budget 2026-27: Positive for equities

and dividends... negative real estate Richard Schellbach

Strategist

richard.schellbach@ubs.com

+61-2-9324 2277

Equity investing becomes (relatively) more appealing after tax changes Lily Huang

The tax changes announced in tonight's Budget remove a significant portion of the Associate Strategist

favourable tax treatment residential property investing has long had in Australia. This lily.huang@ubs.com

+61-2-9324 2656

improves the relative attractiveness of investments in other asset classes, which should

see stronger flows towards equities, funds and platforms. Within equities, the new

capital gains tax (CGT) rules make growth stocks somewhat less appealing, which

increases the relative merits of income returns (i.e. dividend payers). Please refer to our

previous note for growth and income stocks which could be impacted via these changes.

How have the capital gains tax rules changed?

The existing 50% discount on capital gains will be replaced on 1 July 2027 and replaced

with an inflation indexation model that will tax just the real gains in the assets from that

time onwards. This represents a return to the way the system had been pre-1999.

How have the negative gearing rules changed?

Negative gearing will continue for existing assets, but will only be allowed going forward

for property purchases of new builds (i.e. not for purchases of established). Commercial

property and other asset classes, such as shares, will remain subject to existing

arrangements.

Do superannuation funds also face the CGT changes?