The Australian Federal Budget announced on 12 May has proposed major changes to property, investment and trust taxation.
Not every change will affect Australians living in Thailand. Some may not affect you at all. However, if you own Australian property, hold investments, use a family trust, receive Australian income or plan to return to Australia, it is worth checking your position before making major decisions.
For Australians in Thailand, the issue is not only what Australia may tax. You may also need to think about Thai tax residency, remittances, foreign tax credits and the records needed to explain the source of your funds.
This article explains the main Budget changes and how they may affect Australians living in Thailand.
This article is general information only and is not intended to replace Australian tax advice. Some measures are still proposals and the final legislation may change. The aim is to help you understand the main issues, identify what may apply to you and know when further advice may be needed.
The Three Australian Budget Changes That Matter Most to Aussies in Thailand
The Budget includes several tax measures, although three are especially relevant for Australians in Thailand.
- Capital Gains Tax Changes: From 1 July 2027, the 50% capital gains tax discount is expected to be replaced with a new system based on inflation-adjusted gains and a 30% minimum tax rate in some cases. This may affect Australians in Thailand who sell Australian property, shares, ETFs, crypto, managed funds or other investment assets.
- Negative Gearing Changes for Australian Property: From 1 July 2027, negative gearing for residential investment property is expected to be restricted. Existing properties, properties bought after Budget night and new builds may all be treated differently. This may matter if you own Australian rental property, plan to buy property in Australia or are deciding whether to sell or hold an existing investment.
- Discretionary Trust Tax Changes: From 1 July 2028, discretionary trusts are expected to face a 30% minimum tax. This may affect Australian family trusts, trust distributions, business structures and some arrangements involving low-rate beneficiaries or corporate beneficiaries.
Capital Gains Tax: What Is Changing?
Capital gains tax applies when you sell certain assets for more than their cost base.
Under the current Australian rules, individuals may generally qualify for a 50% capital gains tax discount if they hold a CGT asset for more than 12 months. In simple terms, only half of the capital gain is included in taxable income.
The Budget proposes replacing this approach from 1 July 2027.
Under the proposed system, the asset’s cost base would be adjusted for inflation. The gain above inflation would then be taxed. In some cases, a 30% minimum tax rate would also apply.
The proposed CGT reforms are expected to apply to individuals, trusts and partnerships. They are not expected to apply to companies in the same way. The 30% rate should be understood as a minimum tax floor on real capital gains, not as the ordinary tax rate for every taxpayer. Some exceptions may apply.
This is a major shift. The current system gives a simple discount once an asset has been held for more than 12 months. The proposed system focuses on the real gain after inflation and introduces a minimum tax rate for some taxpayers.
The change is not limited to property. It may affect a range of assets, including:
- Australian property
- Shares
- ETFs
- Managed funds
- Crypto assets
- Business assets
- Foreign assets, depending on your Australian tax residency position
The proposed start date is important. For assets held before 1 July 2027 and sold after that date, the gain may need to be split between the period before the new rules begin and the period after.
That means valuations and records around 1 July 2027 may become important for some taxpayers.
How the CGT Changes May Affect Australians in Thailand
For Australians living in Thailand, the CGT changes need to be considered alongside residency, remittance and documentation issues.
Your Australian tax residency position is important. If you remain an Australian tax resident, Australia may tax gains on a wider range of assets, including some overseas assets. If you are a non-resident for Australian tax purposes, your Australian CGT exposure may be narrower.
However, Australian property can still remain taxable in Australia, even if you live in Thailand.
This means two Australians in Thailand could have very different outcomes from the same Budget change.
If you plan to return to Australia, the timing of your return may also matter. Becoming Australian tax resident again can affect how certain assets are treated. Some assets may need to be reviewed before your residency position changes.
The Thai tax question is different.
If you sell an asset and later remit the proceeds to Thailand, you may need to explain the source of the funds, when the gain arose and whether tax was paid elsewhere. This can be especially important if the asset was sold while you were Thai tax resident.
The practical points are clear:
- Check your Australian tax residency position
- Identify which assets Australia may tax
- Review whether 1 July 2027 valuations may be needed
- Keep evidence of purchase dates, sale dates and cost base
- Keep records showing how funds move from Australia to Thailand
- Review the Thai tax position before remitting large amounts into Thailand
A sale that looks simple from an Australian perspective can still raise Thai tax or documentation questions if the money is brought into Thailand.
Negative Gearing: What Is Changing?
Negative gearing is a common feature of Australian property investment.
In simple terms, a property is negatively geared when the costs of holding the property, including interest and other deductible expenses, exceed the rental income. Under the current system, many investors can offset that loss against other income, such as salary or business income.
The Budget proposes restricting this treatment for residential investment property from 1 July 2027.
The proposed rules are likely to treat properties differently depending on when they were acquired and whether they are new builds.
Existing Properties Held Before Budget Night
Residential investment properties held before Budget night may be protected under the proposed grandfathering rules. For grandfathering, the key point is expected to be whether the contract was entered into by 7.30pm AEST on 12 May 2026.
Established Properties Bought After Budget Night
Established residential properties bought after Budget night may lose access to the current negative gearing treatment from 1 July 2027.
Under the proposed rules, rental losses may no longer be available to offset salary, business income or other non-property income. Instead, losses may be quarantined and carried forward to offset future residential property income or gains.
Properties Bought From 1 July 2027
Residential properties bought from 1 July 2027 are expected to fall under the new restricted rules unless they qualify as new builds.
New Builds
New builds are expected to receive more favourable treatment, as the policy aims to encourage new housing supply.
The Budget also indicates that investors in new builds may be able to choose between the current 50% CGT discount and the new arrangements.
This means the tax position of an Australian rental property may depend on several practical details:
- When the property was bought
- When the contract was signed
- When settlement occurred
- Whether the property is established or newly built
- Whether the property was already held before Budget night
- Whether the property generates a profit or loss
For Australians who already own property, the grandfathering rules may be very important. For Australians thinking about buying property, the distinction between an established property and a new build may become more important than before.
How the Negative Gearing Changes May Affect Australians in Thailand
Many Australians in Thailand still own rental property in Australia.
The proposed changes to negative gearing may affect the Australian tax value of that property, especially if it is loss-making. A property that previously produced a useful Australian tax deduction may have a different outcome under the new rules.
This matters if you already own Australian property. It also matters if you are thinking about buying property in Australia while living in Thailand.
Before buying, selling or refinancing Australian rental property, you may need to check:
- Whether the property is likely to be grandfathered
- Whether it is an established property or a new build
- Whether losses can still be used against other income
- Whether rental losses may be carried forward
- Whether the property is likely to generate taxable rental profits in Australia
- Whether rental income is being remitted to Thailand
- Whether future sale proceeds may be brought into Thailand
For Australians in Thailand, the practical question is broader than the Australian deduction. You also need to understand how the property fits into your overall tax position across both countries.
If rental income is kept in Australia, one tax position may apply. If that income is remitted to Thailand while you are Thai tax resident, the Thai position may also need to be reviewed.
Good records are essential. You should keep clear evidence of rental income, expenses, loan interest, repairs, improvements, tax paid in Australia and any transfers made to Thailand.
Main Residence Exemption: Why Australian Homes Need Special Care
Many Australians in Thailand still own a home in Australia.
For some, it is a former home that is now rented. For others, it still feels like home, especially where they split their time between Australia and Thailand.
This area needs special care.
Many Australians assume that if an Australian property is, or once was, their main residence, it will qualify for some form of main residence exemption when sold.
That may not be correct.
The Australian main residence exemption can be affected by several factors, including whether the property has generated rental income, how long you have lived overseas, whether you are an Australian tax resident at the time of sale and how the foreign resident rules apply.
The Budget CGT changes add another layer to an already complex area.
If you are living in Thailand and own a home in Australia, you may need to check:
- Are you currently an Australian tax resident or non-resident?
- How long have you lived outside Australia?
- Has the Australian property generated rental income?
- When did it first generate rental income?
- Do you also own or occupy a home in Thailand?
- Do you have historical valuations?
- Could selling before or after a return to Australia change the tax outcome?
- Will any sale proceeds be remitted to Thailand?
The timing of the sale, your tax residency position, how each property has been used and the records you hold can all affect the outcome.
This is an area where it is much better to check the position before signing a contract, rather than after the sale has already happened.
Discretionary Trusts: What Is Changing?
The Budget also proposes a major change for discretionary trusts.
A discretionary trust is a structure commonly used by Australian families, investors and business owners. The trustee has discretion to distribute income between beneficiaries, often family members or related entities.
This flexibility has made discretionary trusts a common structure for family businesses, investment portfolios and asset planning.
From 1 July 2028, trustees of discretionary trusts are expected to pay a minimum 30% tax on taxable income distributed to beneficiaries.
Beneficiaries would still declare the income in their own tax returns. Under the proposed rules, non-corporate beneficiaries would receive non-refundable credits for tax paid at trustee level.
This may reduce the tax benefit of distributing income to beneficiaries on lower tax rates. It may also affect strategies involving corporate beneficiaries, sometimes referred to as bucket companies.
Some trusts and income categories are expected to be excluded, including certain fixed trusts, widely held trusts, complying superannuation funds, deceased estates and charitable trusts. The final scope will depend on the legislation.
The proposed change does not mean every trust should be closed or restructured. It does mean many families with discretionary trusts should review whether the structure still serves its intended purpose.
The Budget also refers to a proposed restructuring window. This may give some trust owners time to consider their options before the new rules fully apply. However, restructuring can involve Australian tax, stamp duty, legal, financing and commercial issues.
This is not an area for rushed decisions.
How the Trust Changes May Affect Australians in Thailand
Trust structures can become more complex when family members live in different countries.
An Australian family trust may have Australian resident beneficiaries, non-resident beneficiaries, family members living overseas or assets in more than one country. Trust income may also be distributed, retained, reinvested or remitted overseas.
The proposed 30% minimum tax may affect:
- Family trusts distributing income to low-rate beneficiaries
- Trusts using corporate beneficiaries
- Australian business structures using discretionary trusts
- Investment trusts holding Australian assets
- Trusts with beneficiaries living outside Australia
- Families considering a return to Australia
For Australians in Thailand, the Thai tax position may also need to be reviewed if trust distributions are received or remitted into Thailand.
If you have an Australian family trust, it is worth reviewing the structure early. The proposed start date is 1 July 2028, although meaningful restructuring can take time and may require Australian legal and tax advice.
Why Thai Tax Residency and Remittances Matter
This is where the Australian Budget becomes especially relevant for Australians living in Thailand.
You may have an Australian tax issue when income or a gain arises. You may also have a Thai tax issue when funds are brought into Thailand.
Thai tax residency is generally based on time spent in Thailand during the calendar year. If you spend 180 days or more in Thailand during a calendar year, you may be treated as Thai tax resident for that year.
For Thai tax residents, foreign income and gains may need to be reviewed if they are remitted to Thailand.
Thai tax treatment of foreign-sourced income can be complex and has been subject to changing administrative practice. Specific Thai tax advice should be obtained before making large remittances into Thailand.
This means the movement of funds matters.
Examples include:
- Australian rental income brought into Thailand
- Sale proceeds from Australian property transferred to a Thai bank account
- Investment gains moved from Australia to Thailand
- Trust distributions received or remitted into Thailand
- Crypto converted into cash and transferred into Thailand
- Superannuation or pension income remitted to Thailand
The tax answer may depend on what the money represents, when it arose, whether tax was paid in Australia and what records are available.
This is why documentation matters so much.
If funds are moved between Australia and Thailand, you should be able to show the source of the funds, the date they arose, the account history and any tax paid elsewhere.
Which Australians in Thailand Should Review Their Position?
Not every Australian in Thailand needs a detailed review of every Budget measure.
The first step is to identify which part of the Budget may apply to you.
Australians With Australian Rental Property
You should review your position if you own Australian rental property, especially if it is negatively geared or may be sold in the future.
You may need to check whether the property is grandfathered, whether losses can still be used and whether rental income or sale proceeds may be remitted to Thailand.
Australians Who Own a Home in Australia
You should review your position if you own a home in Australia, even if you also have a home in Thailand.
The main residence exemption can be affected by residency, rental history and sale timing. Selling while living overseas may produce a different outcome from the one you expect.
Australians With Shares, ETFs, Crypto or Managed Funds
You should review your position if you hold shares, ETFs, managed funds, crypto or other investments that may be sold after 1 July 2027.
The proposed CGT changes may make valuations, cost base records and transaction history more important. Crypto investors should pay particular attention to exchange records, wallet transfers, acquisition dates and disposal records.
Australians Planning to Return to Australia
You should review your position before returning to Australia.
Your Australian tax residency date may affect how your assets are taxed. Foreign assets, Australian property, investments, trusts and superannuation may all need to be reviewed before you move.
Return planning should ideally happen before you become Australian tax resident again.
Australians With Family Trusts
You should review your position if you have an Australian discretionary trust, receive trust distributions or are a beneficiary of a family trust.
The proposed 30% minimum tax may affect how trust income is distributed, especially where income is paid to low-rate beneficiaries or corporate beneficiaries.
Cross-border family arrangements can add another layer of complexity, particularly where trustees, beneficiaries or assets are spread across more than one country.
Australian Retirees in Thailand
You may need to review your position if you receive Australian pension or superannuation income, sell investments, own Australian property or remit funds to Thailand.
Superannuation and pension income can be treated differently depending on the type of payment, the source of the income and the relevant tax rules. These should be reviewed before assuming the position is straightforward.
Not every Budget change will affect retirees. However, property sales, investment gains, pension income, superannuation and remittances may still need careful review, especially where funds are brought into Thailand.
Key Australian Budget 2026–27 Dates for Expats in Thailand
Several dates are likely to matter for Australians in Thailand.
These dates should be treated as planning markers. Some details may change when final legislation is released.
What Records You Should Start Gathering Now
Good records are essential.
This is especially true if you are living in Thailand and may need to explain the source of funds remitted from Australia.
Depending on your situation, useful records may include:
- Property purchase contracts
- Settlement statements
- Loan statements
- Rental income and expense records
- Property valuations
- Broker statements
- Managed fund statements
- Crypto transaction history
- Trust distribution statements
- Australian tax returns and assessments
- Bank statements showing movement of funds
- Evidence showing whether money transferred to Thailand was income, capital proceeds, savings or another source
The more clearly you can show the source of funds, when they arose and how they moved, the easier it is to review both the Australian and Thai tax position.
Poor records can turn a manageable tax question into costly uncertainty.
What Should You Do Next?
Do not make major decisions based only on Budget headlines.
The same Budget measure can affect different Australians in Thailand in very different ways. Your outcome may depend on your residency status, asset type, ownership structure, sale timing, remittance plans and available records.
You should consider reviewing your position before you:
- Sell Australian property
- Buy Australian property
- Sell shares, ETFs, crypto or other investments
- Return to Australia
- Restructure a family trust
- Move large sums from Australia to Thailand
- Assume an Australian home is exempt from CGT
In many cases, you may need specialist Australian tax advice. You may also need Thai tax advice on residency, remittances and documentation.
Not sure which Budget changes may affect you? Download our Australian Budget 2026–27 checklist below and use it to review your property, investments, trusts, income, remittances and records before you act.
Speak With Our Team Before You Make a Decision
The Australian Budget changes may not affect every Australian living in Thailand.
However, if you own Australian property, hold investments, use a family trust, receive Australian income or plan to return to Australia, it is worth checking your position before you act.
Our team can help you understand which issues may apply to you, how they may interact with Thai tax residency and remittances and whether specialist Australian tax advice may be needed before making decisions.
Further Reading in This Series
The Australian Budget 2026–27 may affect Australians in Thailand in different ways depending on their property, investments, trust structures, tax residency and remittance plans. You may also find these related articles useful:
Australian Property Owners in Thailand: How the 2026–27 Budget May Affect You
A practical guide to the proposed negative gearing changes and what they may mean if you own Australian rental property while living in Thailand.
Australian Budget 2026–27: What Expats in Thailand with Shares, ETFs and Crypto Need to Know
A guide to the proposed CGT changes and why investment records, valuations and remittance planning may matter.
Australian Budget 2026–27: Australian Family Trusts and Expats in Thailand
A guide to the proposed 30% minimum tax on discretionary trusts and what Australian expats with family trust structures may need to review.
