If you’re retired or approaching retirement, the headlines from the 2026–27 Federal Budget — sweeping changes to capital gains tax, negative gearing and trusts — may have caused some understandable concern. The reassuring news is that for most retirees and Age Pension recipients, the impact is far smaller than the headlines suggest. Let’s separate what actually affects your retirement income from what doesn’t.
Age Pension recipients are exempt from the new minimum tax
The most important point for pensioners is this: income support recipients, including Age Pension recipients, are exempt from the new minimum tax on capital gains. So while the Budget proposes a minimum 30% tax on capital gains for many taxpayers from 1 July 2027, that minimum tax is not designed to capture Age Pension recipients. If you’re drawing the Age Pension, this particular measure is not aimed at you.
Your family home remains protected
For most retirees, the family home is the largest asset — and it stays outside the CGT net. The main residence exemption is not changing, so selling the home you live in remains exempt from capital gains tax, as it is today. That matters for retirees considering downsizing, because the proceeds of selling your main residence are not caught by the new CGT rules.
Superannuation is largely left alone
Much of retirement income in Australia is funded through superannuation, and here too the picture is steady. The CGT discount for superannuation funds is not expected to change. For retirees drawing a pension from super, or pre-retirees still building their balance, the core tax advantages of the superannuation system remain in place. If anything, because investing inside super continues to enjoy concessional treatment while investing in your own name becomes less generous, super looks relatively more attractive than before.
Where pre-retirees should pay attention
If you’re in the years just before retirement and hold investments outside super — an investment property, a share portfolio, or assets in a family trust — some of the broader Budget changes may be relevant to how you transition into retirement:
- If you plan to sell investment assets to fund retirement, the timing relative to 1 July 2027 (when the CGT changes are proposed to begin) is worth planning carefully.
- If you hold an established investment property, the negative gearing changes apply only to properties bought after Budget night, so existing holdings are grandfathered — but your strategy for eventually selling and converting to retirement income still deserves a review.
- If you invest through a discretionary trust, the proposed minimum 30% tax on trusts from 1 July 2028 may affect how you draw income, and there is transitional rollover relief to help restructure — a conversation to have with both your adviser and accountant.
What this means for your retirement plan
For the typical retiree living on the Age Pension, super, and the family home, the 2026–27 Budget changes very little about your day-to-day income. The structural reforms are aimed largely at higher-income investors building wealth outside super, and they come with exemptions that protect pensioners and the family home. As with all of these measures, they are proposed and not yet law, so we’ll continue to watch the detail as it develops.
That said, retirement planning is never “set and forget.” Changes like these are exactly why a regular review matters — to confirm your income is secure, your Age Pension entitlements are maximised, and your assets are arranged in the most effective way for your stage of life.
At SMI Financial Solutions, helping local families navigate the Age Pension and build confident, sustainable retirement income is core to what we do. If the Budget has left you wondering where you stand, we’re here to give you a clear answer based on your own circumstances.
Want to know what the 2026–27 Budget means for your situation?
Book a consult call with the SMI Financial Solutions team on 1300 222 484 or at smifinancialsolutions.com.au
Important information
This article is general in nature and has been prepared without taking into account your objectives, financial situation or needs. It does not constitute financial, taxation or legal advice. The Budget measures referred to (including the proposed capital gains tax, negative gearing and discretionary trust changes) were announced in the 2026–27 Federal Budget and, at the time of writing, are proposed and not yet law; details may change before or if they are legislated. Before acting on any information, you should consider its appropriateness having regard to your own circumstances and seek advice from a qualified professional. SMI Financial Solutions Pty Ltd ABN 92 154 155 307 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049, AFSL 236523. Christopher Smith (478941) and SMI Financial Solutions Pty Ltd (418006) are authorised to provide credit services with Connective Broker Services ACN 161 731 111, ACL 384324. Infocus is not liable for any credit services provided by either entity. Your full financial situation will need to be reviewed prior to acceptance of any offer or product.