A GUIDE TO TAX CHANGES UNDER LABOR:& HOW TO PROTECT WHAT YOU’VE BUILT
The financial landscape is currently in flux, especially with a new party in office and fresh policy shifts on the horizon. We’ve written this guide to help you navigate the impending changes with confidence — so you can stay informed, make intentional choices, and continue building a life of financial freedom and clarity.
FOR EXPATS
If you're living overseas, it’s important to know that the new tax cuts brought upon by the new Labor government do not apply to non-residents.
From 1 July 2025, if you're classified as a non-resident for tax purposes, you'll be taxed at a flat 30% from the first dollar of Australian income up to $135,000, with higher rates beyond that. There’s no tax-free threshold, no offsets, and no benefit from the upcoming changes.
As of 1 April 2024, foreign nationals, including residents, are also banned from purchasing existing Australian residential property for two years.
The government is also tightening Capital Gains Tax (CGT) rules for foreign residents. These include:
Broadening what qualifies as taxable Australian property
Calculating asset value over a 12-month average, not a snapshot in time
Pre-sale reporting to the ATO for any share or ownership interest over $20 million
Cracking down on timing strategies to defer CGT
While superannuation rules haven’t yet changed for expats, Division 296 is still on the table. If passed, it would apply a 15% tax to super balances over $3 million — including unrealised gains. Labor supports the measure, and its implementation looks likely. This does apply to expats and non-residents, so it’s wise to keep an eye on it.
What should you do if you’re an expat?
Whether you're planning to return home, hold assets long-term, or invest from overseas, now is the time to:
Review your tax residency and structure
Reassess any CGT exposure or upcoming transactions
Monitor your super balance closely if you’re approaching $3 million
Getting ahead of these changes protects both your peace of mind and your financial momentum.
FOR TAX RESIDENTS
The Albanese government’s updated tax cuts are designed to deliver relief, especially for middle and lower-income Australians.
Following the initial changes in July 2024, further reductions are scheduled for 2026 and 2027.
For someone earning the average of $79,000:
An additional $268 in tax cuts will apply in 2026–27
Growing to $536 annually from 2027–28
When combined with earlier cuts, that’s:
$1,922 in 2026–27
$2,190 from 2027–28, compared to 2023–24 tax settings
At the same time, the Superannuation Guarantee, the minimum your employer must contribute to your super, has increased to 12%, up from 11.5%. This means more money going toward your future, by default.
What should you do if you’re a tax resident?
Make sure your employer is meeting the updated Super Guarantee
Use the extra take-home pay from tax cuts wisely… Consider contributions to super, offsetting debt, or investing
Ensure your tax withholding reflects the updated brackets
These updates give you more control and flexibility, so use them to reinforce your long-term financial goals.
FOR SMSF HOLDERS
Like we mentioned above, Division 296 continues to be one of the most controversial proposals under the current government.
If passed, it will apply an extra 15% tax on super balances over $3 million, on top of the existing 15% rate. Notably, it would also apply to unrealised gains, meaning you could be taxed on growth you haven’t locked in yet.
Roughly 80,000 Australians are expected to be affected, including 13,000 small business owners who hold commercial property through their SMSFs. The government has signalled strong intent to push this through, so keep your attention on it.
What should you do if you have a large super or SMSF?
Review how assets in your SMSF are valued and recorded
Consider strategic withdrawals or redistributions if nearing the $3M threshold
Speak to a trusted advisor about restructuring or spreading risk
With early planning and foresight, you can reduce the risk of unintended tax outcomes.
FOR BUSINESS OWNERS & INVESTORS
Several Labor reforms focus squarely on business owners, investors, and high-net-worth individuals.
One that stands out? Discretionary trust distributions. They will now face tougher scrutiny.
Previously, income streaming through trusts allowed for more flexibility and family-wide tax efficiency.
New measures tighten this by:
Increasing compliance activity from the ATO
Reassessing whether certain distributions qualify as “genuine”
Limiting the use of adult children or lower-taxed family members to reduce overall tax
There’s also more funding for audits, especially in property-heavy structures, SMSFs, and multi-entity groups.
If you’re making large transactions (such as property sales, restructuring, or international transfers), you’ll also face expanded reporting obligations and timing rules.
What should you do if you run a business or use a trust?
Reassess your trust deeds and distribution strategies before 30 June
Be prepared to justify the commercial reason behind each trust distribution
Check how each of your structures will fare under ATO scrutiny
This is the moment to make sure your entities are working for you, not against you.
Feeling unsure?
If you’re struggling to understand how these changes affect you or how to restructure under the new government, reach out to us here at FRE.DM Wealth. We can help you take the complexity off your plate, realign your financial position, and set up structures that protect your wealth and empower your lifestyle.
Because financial freedom is more than just the numbers, investments, and balances… It's about building a life that feels sustainably abundant, intentional, and truly yours.
