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2026 tax offsets

Top 2026 Tax Offsets You Might Be Missing in Australia

Quick Answer:
Australians commonly miss the Small Business Income Tax Offset (up to $1,000), the Seniors and Pensioners Tax Offset (up to $2,230), and the Private Health Insurance Offset. From 1 July 2026 the bottom individual tax rate also drops from 16% to 15%, and a $1,000 instant work deduction starts from the 2026-27 income year.

Tax offsets reduce your tax bill dollar for dollar. If you are lodging your 2025-26 return now, this is the right time to check you are claiming everything you are entitled to. Unlike tax deductions, which reduce your taxable income, tax offsets reduce the tax you owe directly. That makes them worth checking carefully, especially if you qualify for more than one.

Here are six offsets Australians often miss: the Small Business Income Tax Offset (up to $1,000), the Seniors and Pensioners Tax Offset (up to $2,230), the Private Health Insurance Offset (up to 32.385% of premiums, refundable in 2026), the Zone Tax Offset ($57 to $1,173), and the Invalid and Invalid Carer Offset. From 1 July 2026 the bottom tax rate has also dropped from 16% to 15%, and a $1,000 instant work deduction is legislated to begin from the 2026-27 income year.

1. Small Business Income Tax Offset: The Forgotten $1,000

Maximum benefit: $1,000 per year. Who qualifies: sole traders, and individuals with income from a small business partnership or trust, where the business has an aggregated turnover under $5 million. Calculation: 16% of your net small business income, capped at $1,000.

Example: if your net small business income is $6,250 or more, you get the full $1,000 offset. With $3,000 in business income, you would get a $480 offset.

If you run a business through a company structure rather than as a sole trader, different rules apply. Our guide to small business tax changes for 2026-27 covers rates and concessions at the entity level, and our avoidable business tax mistakes article covers the errors we see most often at tax time.

2. Seniors and Pensioners Tax Offset (SAPTO): Relief for Retirees

Maximum benefit: $2,230 for singles, $1,602 for each member of a couple. Who qualifies: recipients of eligible Australian Government pensions or allowances, including the Age Pension, Disability Support Pension, Carer Payment, and veterans’ pensions and allowances. No application is required; it is calculated automatically if you are eligible.

Income thresholds for 2025-26: singles get the full offset if rebate income is under $34,919, phasing out completely at $52,759; couples get the full offset if each partner’s rebate income is under $30,994, phasing out at $43,810 each; couples separated by illness get the full offset under $33,732, phasing out at $47,599 each. Unused SAPTO can transfer automatically between eligible spouses.

Example: John, 68, receives the Age Pension with $25,000 of rebate income. He gets the full $2,230 SAPTO, which may eliminate his tax liability for the year.

See the ATO’s seniors and pensioners tax offset page for the full thresholds.

3. Private Health Insurance Offset: The Refundable One

Who qualifies: private health insurance holders under the Tier 3 income threshold. This is one of the few refundable offsets, meaning you can get money back even if you do not owe tax. You can take it as reduced premiums throughout the year, or as a refundable offset when you lodge.

Income thresholds and rebate rates for 1 July 2025 to 31 March 2026:

TierSingle IncomeFamily IncomeRebate (under 65)Rebate (65-69)Rebate (70+)
Base tier$101,000 or less$202,000 or less24.288%28.337%32.385%
Tier 1$101,001 – $118,000$202,001 – $236,00016.192%20.240%24.288%
Tier 2$118,001 – $158,000$236,001 – $316,0008.095%12.143%16.192%
Tier 3Over $158,000Over $316,000No rebateNo rebateNo rebate

These thresholds rose from the 2024-25 year, so it is worth rechecking which tier you fall into even if nothing else about your income changed.

Pro tip: if you chose the premium reduction method but earned less than expected, you may get an additional refund at tax time.

4. Zone Tax Offset: Remote Area Recognition

Maximum benefit: $57 (Zone B) to $1,173 (Special Areas). Who qualifies: residents of designated remote areas for 183 or more days. Note: FIFO workers are generally no longer eligible unless their usual place of residence is also zoned.

Zone amounts, unchanged for 2025-26: Zone A is $338 base amount, Zone B is $57 base amount, and Special Areas is $1,173 base amount, plus possible dependent amounts.

Your usual place of residence, not just your work location, needs to be in the designated zone for at least 183 days. Check the ATO’s Australian zone list to confirm your postcode.

5. Invalid and Invalid Carer Offset: Support for Caregivers

Benefit amount: variable, use the ATO calculator to work out your entitlement. Who qualifies: those supporting an invalid spouse, parent, or a child, brother, or sister aged 16 or over who is receiving an eligible government payment, including the Disability Support Pension, Carer Payment, Carer Allowance, and Invalidity Service Pension. Income limit: your adjusted taxable income must be under the current threshold.

What Changed From 1 July 2026

Two changes that were “coming” in last year’s version of this article are now in effect or on the way.

The bottom tax rate dropped to 15%. From 1 July 2026, the 16% rate on income between $18,201 and $45,000 fell to 15%, worth up to $268 a year for anyone earning above $45,000. A further cut to 14% is legislated for 1 July 2027.

The $1,000 instant work deduction is legislated, but not yet claimable. This standard deduction for work-related expenses applies from the 2026-27 income year, which means it will first appear on returns lodged from July 2027. It does not apply to the 2025-26 return you are lodging now, and you can still claim your actual work expenses with receipts this year if that gives a larger deduction. Our work from home deductions guide covers what you can claim under the existing rules.

Before You Lodge: A Quick Checklist

  • Confirm which private health insurance tier applies to your 2025-26 income, not last year’s.
  • Check whether you qualify as a small business entity for the $1,000 offset.
  • Confirm your zone classification if you live in a remote area.
  • Review SAPTO eligibility if you or your partner receive a government pension.
  • Check the invalid/carer offset if you support a family member with a disability.
  • If you are a renter with an investment property, our rental property deductions guide and ATO compliance and audit triggers guide cover the areas the ATO is checking most closely this year.
  • Recently married or in a new relationship? See how it affects your return in our marriage and tax guide.
  • Lodging for the first time? Start with our first tax return guide.
  • Not sure what your refund might look like? Try our tax calculator.

Why Professional Help Matters

Offsets involve eligibility rules, income thresholds, and timing that interact with each other and with the tax law changes taking effect this year. A professional tax accountant can check which offsets apply to your circumstances, and how they combine.

At ITP, our tax professionals work through this with clients across every income level, from sole traders to retirees to families with more complex situations.

Don’t leave money on the table. Book a consultation with ITP to check every offset you are entitled to, or explore our small business tax services if you run a business.

Frequently Asked Questions

What’s the difference between tax offsets and deductions?

Deductions reduce your taxable income. Offsets reduce your tax bill directly, dollar for dollar, which generally makes them more valuable.

Can I claim multiple offsets?

Yes. You can claim every offset you are eligible for, and they combine to reduce your total tax liability.

Are offsets refundable?

Most are non-refundable, meaning they can only reduce your tax to zero. The private health insurance offset is the exception. It is refundable.

How do I know if I live in a remote zone?

Check the ATO’s zone list tool using your postcode.

Is there a low income tax offset for 2025-26?

No. The low and middle income tax offset (LMITO) ended after the 2021-22 income year and has not applied since.

When can I claim the $1,000 instant work deduction?

Not this year. It applies from the 2026-27 income year, so it will first appear on returns lodged from July 2027. For your current 2025-26 return, you still need to claim actual work expenses with records.

Get Every Offset You Are Entitled To

Tax offsets reward attention to detail. The rules on eligibility, income thresholds, and timing shift a little every year, and this year is no exception with the new 15% tax rate and the incoming $1,000 instant deduction. ITP Accounting Professionals has helped Australians work through offsets like these for decades. If you want a second set of eyes on your 2025-26 return, get in touch with your local ITP office before you lodge.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before claiming any offset, speak with a qualified tax professional who can assess your circumstances.

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Rental Property Tax Deductions 2026-27: What Investors Need to Know

Quick Answer:
For 2026-27, you can still claim rental expenses like interest, rates, repairs, and depreciation as usual. Negative gearing changes do not start until 1 July 2027 and only affect established properties bought after 12 May 2026, and new ATO guidance now requires holiday homes to be mainly used for rental income to claim ownership expenses.

Rental property tax rules have not changed much for the 2026-27 year itself, but two developments are worth understanding now: fresh ATO guidance on holiday homes and short-term rentals, and a negative gearing reform that starts in 2027-28 but affects decisions you might make today.

Quick Summary: Rental Property Deductions 2026-27

  • Immediate deductions: interest on loans, council and water rates, insurance, repairs, agent fees, advertising, and depreciating assets costing $300 or less
  • Deductions over several years: capital works (Division 43), borrowing expenses, and decline in value of assets costing more than $300
  • Still no deduction for holding vacant land, unchanged since 1 July 2019
  • New ATO ruling (TR 2026/1) and two compliance guidelines now set out how holiday homes and short-term rentals are assessed
  • Negative gearing quarantining starts 1 July 2027, and only applies to established residential properties bought after 12 May 2026
  • Properties held on 30 June 2027 get a value reset for CGT purposes, with existing gains keeping the 50% discount

1. Expenses You Can Claim Immediately

You can claim a deduction in the same income year you incur the expense for costs directly linked to earning rental income, including:

  • Interest on your investment loan
  • Council rates, water and sewerage rates, and land tax
  • Building, contents, and public liability insurance
  • Repairs and maintenance (not improvements)
  • Property agent fees and commissions
  • Advertising for tenants, cleaning, gardening, and pest control
  • Depreciating assets costing $300 or less

Full detail on what you can and can’t claim is on the ATO’s rental expenses page.

2. Expenses You Claim Over Several Years

Some costs are spread across multiple income years rather than claimed upfront:

  • Capital works deductions (Division 43) for construction and structural improvement costs
  • Borrowing expenses, spread over 5 years or the loan term, whichever is shorter
  • Decline in value of depreciating assets costing more than $300

3. Expenses You Can’t Claim

  • Holding costs for vacant land, unchanged since 1 July 2019, even if you intend to build a rental property on it
  • Second-hand depreciating assets acquired after 9 May 2017 (in most cases)
  • The private-use portion of any expense, apportioned on a fair and reasonable basis
  • Acquisition and disposal costs of the property itself, and travel to inspect a property before you buy it

4. New ATO Guidance on Holiday Homes and Short-Term Rentals

The ATO has released Taxation Ruling TR 2026/1 along with two Practical Compliance Guidelines (PCG 2026/2 and PCG 2026/3), updating how it assesses rental income and expenses across both long-term and short-term rentals, including properties listed on booking platforms.

The key test for a holiday home that you also rent out: it must be used, or held for use, mainly to produce rental income for you to claim ownership and use expenses such as interest, council and water rates, body corporate fees, and repairs and maintenance.

If the property is not mainly used to produce rental income, only expenses directly tied to letting it out, such as advertising, cleaning after a guest stays, and booking or commission fees, remain deductible. If it is mainly used for rental income but has some private use, such as a week or two in the off season, the ownership and use expenses can still be claimed but must be apportioned to exclude the private-use period.

PCG 2026/2 sets out methods the ATO accepts as fair and reasonable when apportioning expenses between income-producing and private use. If your rental strategy involves any short-term or holiday-home element, it is worth reviewing your record-keeping against this guidance before you lodge. See our rental property compliance guide for what the ATO is checking most closely this year.

5. Negative Gearing Changes Coming From 1 July 2027

This does not affect your 2026-27 return, but it affects decisions you make about property this year, so it is worth understanding now. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received assent on 26 June 2026 and quarantines negative gearing losses starting from the 2027-28 income year.

Under the reform, if you buy an established residential property after 12 May 2026 (budget night), rental losses on that property can no longer offset your salary or other income from 1 July 2027 onward. Instead, the loss is quarantined: it can only be offset first against residential rental income, then against residential capital gains, and it carries forward indefinitely if unused.

Properties bought on or before budget night are grandfathered and keep the current rules. New residential dwellings are also intended to be excluded from the quarantining rule, though the precise definition of a qualifying new build is still to be set by a ministerial instrument, so treat that carve-out as unconfirmed until it is made.

A related change applies to capital gains tax: residential properties held on 30 June 2027 are treated as sold at market value and reacquired the next day. Growth up to that point keeps the existing 50% CGT discount when you eventually sell, deferred until sale. Growth after 1 July 2027 is instead subject to indexation with a 30% discount floor rather than the flat 50% discount. In practice, this makes it worth recording the market value of any investment property you hold as at 30 June 2027, whether or not you plan to sell.

Before You Lodge: A Quick Checklist

  • Separate repairs (deductible now) from improvements (capital works, deducted over time).
  • Check whether any part of the year the property was vacant, used privately, or rented below market rate, and apportion expenses accordingly.
  • If you own a holiday home you also rent out, confirm it was mainly used to produce rental income before claiming ownership expenses.
  • Keep evidence the property was genuinely held to produce rental income, such as agent communications, for any period it was not tenanted.
  • If you bought an established residential property after 12 May 2026, start tracking it separately, since the loss quarantining rule will apply to it from the 2027-28 year. Our top tax offsets guide and small business tax changes guide cover other 2026-27 changes that may also apply if you run a business alongside your investments.

Why Professional Help Matters

Rental property tax is rarely simple once you factor in apportionment, capital works schedules, holiday-home rules, and now a negative gearing change to plan around. ITP Accounting Professionals works with property investors across every stage, from first purchase to portfolio planning around the 2027 changes.

Don’t guess on apportionment or miss a deduction. Book a consultation with ITP to check your rental property return before you lodge.

Frequently Asked Questions

Do the negative gearing changes affect my 2026-27 tax return?

No. The quarantining rule does not start until the 2027-28 income year (from 1 July 2027), and even then it only applies to established residential properties bought after 12 May 2026.

Can I still claim interest on my rental property loan this year?

Yes. For 2026-27, interest on rental property loans remains fully deductible in the year it is incurred, in the same way as previous years.

What changed with holiday home deductions?

The ATO has issued updated guidance (TR 2026/1 and two compliance guidelines) clarifying that a holiday home you also rent out must be mainly used to produce rental income for you to claim ownership and use expenses like interest, rates, and repairs.

Can I claim costs for holding vacant land I plan to build a rental on?

No. Since 1 July 2019, holding costs for vacant land cannot be claimed as a deduction, even if you intend to build a rental property on it, with limited exceptions for land affected by a natural disaster.

Stay Ahead of the Changes

Most rental property rules are steady for 2026-27, but the holiday home guidance and the upcoming negative gearing reform are both worth acting on now rather than at tax time. ITP Accounting Professionals has helped Australian property investors get their deductions right for decades. If you want a second set of eyes on your rental property position, get in touch with your local ITP office before your next lodgement.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before acting on any of these thresholds, speak with a qualified tax professional who can assess your circumstances.

Small Business Tax Rate

Small Business Tax Changes 2026-27: What’s Different From Last Year

Quick Answer:
The instant asset write-off for small businesses is now permanently $20,000 from 1 July 2026. Company tax rates, the small business income tax offset, and GST cash accounting thresholds are unchanged for 2026-27.

Last year’s headline was about a shrinking instant asset write-off to $1,000. This year, the news is better: the write-off is back up and now permanent. If you run a small business, here is what actually changed for 2026-27, and what has stayed the same.

Quick Summary: Small Business Tax Changes 2026-27

The biggest change for small business owners this year is the instant asset write-off, which is now permanently set at $20,000 for eligible small businesses, rather than dropping to the $1,000 threshold 2026-27. Most other small business thresholds are unchanged.

  • Instant asset write-off: permanently $20,000 from 1 July 2026 (up from expected $1,000)
  • Company tax rates: 25% for base rate entities (turnover under $50 million), 30% for other companies
  • Small business income tax offset: unchanged, up to $1,000 for sole traders and eligible partners in a partnership
  • GST cash accounting: still available for businesses with turnover under $10 million
  • Individual tax rate: bottom rate cut from 16% to 15% from 1 July 2026, relevant if you run your business as a sole trader

1. Instant Asset Write-Off: Back Up to $20,000, and Permanent

This is the change every small business owner has been waiting for. The instant asset write-off has been permanently increased to $20,000 from 1 July 2026.

Who qualifies: small businesses with an aggregated turnover under $10 million, using simplified depreciation. Eligible assets costing less than $20,000 each can be written off immediately in the year they are first used or installed ready for use, instead of being depreciated over several years.

Assets that cost $20,000 or more can go into the general small business pool for accelerated depreciation rates applied to all assets or use the standard rates of depreciation for individual assets based on their estimated life if not wanting to use the small business pool.

See the ATO’s instant asset write-off guidance for the full eligibility rules.

Example: a business buys a $18,000 delivery van fit-out in October 2026. Under the 2026-27 rules, the full $18,000 is deductible in the year it is installed ready for use.

Because this change is now permanent rather than a temporary extension, it is worth building into ongoing equipment planning rather than treating it as a one-off deadline to beat.

2. Company Tax Rates: Base Rate Entities Still at 25%

No change here for 2026-27, but it catches out business owners every year, so it is worth restating. Companies that qualify as base rate entities pay 25% tax. All other companies pay 30%.

To qualify as a base rate entity, a company needs an aggregated turnover under $50 million, and no more than 80% of its assessable income can be passive income (such as interest, dividends, rent, or royalties). If passive income makes up more than 80% of assessable income, the 30% rate applies regardless of turnover.

Full detail is on the ATO’s company tax rate changes page.

3. Small Business Income Tax Offset: Steady at $1,000

The offset for unincorporated small businesses, sole traders and individuals with a share of net small business income from a partnership or trust, is unchanged for 2026-27: 16% of net small business income, capped at $1,000, for businesses with an aggregated turnover under $5 million. See our top tax offsets guide for how this fits alongside the other offsets available this year.

4. GST Cash Accounting: Still Available Under $10 Million

Businesses with an aggregated turnover under $10 million can still choose to account for GST on a cash basis, which can help cash flow by aligning GST payable with money actually received. Businesses at $10 million or more must use the non-cash (accruals) method and full BAS reporting, and businesses at $20 million or more must report GST monthly rather than quarterly.

See the ATO’s guide to choosing a GST accounting method for the full turnover tests.

5. Individual Tax Changes That Affect Sole Traders

If you operate as a sole trader, your business income is taxed at your individual rate, so the individual tax changes for 2026-27 apply directly to you. The bottom tax rate dropped from 16% to 15% on income between $18,201 and $45,000. Our top tax offsets guide and work from home deductions guide cover both changes in more detail.

Before You Lodge: A Quick Checklist

  • Check whether any equipment purchases this year qualify for the $20,000 instant asset write-off.
  • Confirm your general small business pool assets are still tracked correctly at the new $20,000 threshold.
  • Review whether your company still qualifies as a base rate entity if your turnover or passive income has changed.
  • Check your GST accounting method still matches your current turnover.
  • Sole traders should check the small business income tax offset and the individual rate change together, since both affect the same return.
  • If you also hold an investment property alongside your business, our rental property deductions guide and ATO compliance and audit triggers guide cover what the ATO is checking most closely this year.

Why Professional Help Matters

Small business tax planning now means tracking several thresholds at once: turnover for the instant asset write-off, turnover and passive income for company tax rates, turnover for GST accounting, and your own individual rate if you are a sole trader. Getting one of these wrong can cost thousands of dollars in missed concessions or an unexpected bill.

At ITP, our business tax professionals work through these thresholds with clients across every structure, from sole traders to companies with growing turnover.

Don’t leave concessions unclaimed. Book a consultation with ITP to check which thresholds apply to your business this year.

Frequently Asked Questions

Is the $20,000 instant asset write-off permanent now?

Yes. From 1 July 2026 it is a permanent feature of the tax law, not a year-by-year extension that needs to be renewed by Parliament.

Does the instant asset write-off apply to my company as well as my sole trader business?

Yes, it applies to any small business entity using simplified depreciation with an aggregated turnover under $10 million, regardless of structure.

What happens to assets that cost $20,000 or more?

They are added to the general small business simplified depreciation pool and depreciated at 15% in the first year and 30% in following years.

Did the base rate entity turnover threshold change for 2026-27?

No. It remains $50 million, unchanged since 1 July 2018, alongside the passive income test of no more than 80% of assessable income.

Get on Top of This Year’s Changes

The instant asset write-off increase is the standout change for small business this year, but it is worth checking every threshold against your current turnover rather than assuming last year’s settings still apply. ITP Accounting Professionals has helped Australian small businesses navigate changes like these for decades. If you want a second set of eyes on your 2026-27 planning, get in touch with your local ITP office before your next lodgement.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before acting on any of these thresholds, speak with a qualified tax professional who can assess your circumstances.

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Marriage and Tax in Australia 2026-27: What Couples Need to Know

Quick Answer:
Marriage does not change your individual tax rate, but the ATO assesses some things on combined household income once you are married or in a de facto relationship. For 2026-27, the Medicare levy surcharge family threshold is $210,000, and only one main residence per couple can be exempt from capital gains tax at a time.

Getting married or moving in with a partner does not change your personal tax rate. What it does change is how the ATO looks at your household. The ATO treats married, de facto, and same-sex couples in a genuine domestic relationship the same way for tax purposes, and several rules switch from an individual to a combined-income basis once you are a couple.

Quick Summary: Marriage and Tax 2026-27

  • You still lodge separate tax returns, but you must declare your spouse’s details, including their income, on your return
  • Medicare levy surcharge: family threshold is $210,000 for 2026-27, up from $202,000, rising $1,500 per dependent child after the first
  • Private health insurance rebate: uses the same combined-income tiers as the surcharge, and reduces as household income rises
  • Only one main residence per couple can be exempt from capital gains tax at any one time
  • Spouse super contribution offset: up to $540 if your spouse earns under $40,000, full offset if they earn $37,000 or less
  • HELP/HECS repayments are still based on your individual income, not your combined household income

1. You Still Lodge Separately, But You Must Declare Each Other

Marriage does not create a joint tax return in Australia. You and your spouse each lodge your own return. However, your tax return asks for your spouse’s taxable income, even though it is not added to yours, because it determines your eligibility for several offsets, rebates, and levies that are assessed on a household basis.

This matters most for offsets and thresholds that use combined or spouse income as a test. Our top tax offsets guide covers several of these, including offsets where your spouse’s income affects what you can claim.

2. Medicare Levy Surcharge: The Combined Threshold Jumps

If you are single and earn more than $105,000 without private hospital cover, you pay the Medicare levy surcharge. As a couple, the threshold is $210,000 combined income for 2026-27, not double the single rate applied to each of you individually, but a single family threshold that applies to your combined income.

The family threshold increases by $1,500 for each dependent child after the first. Surcharge rates for 2026-27 are the same tiered structure as for singles: 1% of income for family income between $210,001 and $246,000, 1.25% between $246,001 and $328,000, and 1.5% above $328,001.

The catch many couples miss: if either partner does not have private hospital cover, the surcharge can apply to your combined income even if one partner earns well under the single threshold on their own.

Full thresholds and rates are on the ATO’s Medicare levy surcharge page.

3. Private Health Insurance Rebate Also Uses Combined Income

The private health insurance rebate uses the same income tiers as the Medicare levy surcharge. For 2026-27, couples and families with combined income of $210,000 or less receive the highest rebate tier, phasing down through $210,001 to $246,000, $246,001 to $328,000, and reducing to zero above $328,001. The rebate percentage also varies by age, with higher rebates for policyholders aged 65 to 69 and 70 or over.

Because the rebate is means-tested on combined income, a change in either partner’s income, a pay rise, a new job, or a partner returning to work, can shift your rebate tier without you realising until tax time.

See the ATO’s private health insurance rebate thresholds for the full tiers by age.

4. Only One Main Residence Per Couple Is CGT-Exempt

This is the change that catches out the most couples, especially where each partner owned a property before the relationship began. The main residence exemption from capital gains tax only applies to one home per couple at any given time, even if you and your spouse each separately owned a home before marrying.

If you and your spouse have different main residences at the same time, you must either nominate one property as the exempt main residence for both of you, or split the exemption. If you own 50% or less of the home you nominate, your share is fully exempt. If you own more than 50%, your share is only exempt for half the period you and your spouse held different homes.

See the ATO’s guidance on eligibility for the main residence exemption for how the rule applies to couples.

If you are weighing up keeping, renting out, or selling a property you owned before the relationship, it is worth working through the numbers before you decide. Our rental property deductions guide covers what you can claim if you end up renting one property out instead.

5. Spouse Super Contributions: A Small But Useful Offset

If your spouse earns a low income or is not working, you can contribute to their super and claim a tax offset. For 2026-27, the full $540 offset applies if your spouse’s income is $37,000 or less, phasing out completely once their income reaches $40,000. The offset is 18% of the lesser of $3,000 (reduced for income between $37,000 and $40,000) or the amount you actually contributed. See the ATO’s spouse super contributions page for eligibility.

6. HELP and HECS Repayments Stay Individual

Unlike the Medicare levy surcharge and the private health insurance rebate, compulsory HELP and HECS repayments are calculated on your own individual income, not your combined household income. Getting married does not change your repayment threshold or rate.

Before You Lodge: A Quick Checklist

  • Declare your spouse’s income and details on your return, even though you lodge separately.
  • Check your combined income against the $210,000 Medicare levy surcharge family threshold if either of you lacks private hospital cover.
  • Confirm which property is nominated as your exempt main residence if you and your spouse each owned a home before the relationship.
  • Check whether a spouse super contribution makes sense if one of you earns under $40,000.

Why Professional Help Matters

Marriage changes which rules apply on an individual basis and which apply on a combined basis, and it is easy to miss one of these when your circumstances change. ITP Accounting Professionals helps couples work through offsets, surcharges, and CGT decisions together.

Don’t assume nothing has changed just because you still lodge separately. Book a consultation with ITP to check how your relationship status affects your return this year.

Frequently Asked Questions

Do my spouse and I lodge a joint tax return in Australia?

No. Australia does not have joint tax returns. You and your spouse each lodge separately, but you must declare your spouse’s income and details on your own return.

What counts as a spouse for tax purposes?

The ATO treats married, de facto, and same-sex couples the same way, as long as you are in a genuine domestic relationship, regardless of whether you are formally married.

Does the Medicare levy surcharge threshold double for couples?

No. It rises to a single combined family threshold, $210,000 for 2026-27, rather than doubling the single threshold for each partner.

Can my spouse and I both claim the main residence exemption on different properties?

Only in a limited way. If you have different main residences at the same time, you generally need to nominate one as exempt for both of you, or split the exemption between the two properties for the period you were apart.

Get Your Combined Position Right

Most of the rules that change with marriage are easy to miss because your return still looks the same as it did when you were single. ITP Accounting Professionals has helped Australian couples navigate these thresholds for decades. If you want a second set of eyes on your combined position, get in touch with your local ITP office before your next lodgement.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before acting on any of these thresholds, speak with a qualified tax professional who can assess your circumstances.

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Rental Property ATO Compliance 2026-27: Audit Triggers and Prevention Guide

Quick Answer:
The ATO cross-checks rental property returns against rental bond data, property manager records, and short-term rental platform data through to 2026. The most common triggers are unreported rental income, over-claimed interest on mixed-purpose loans, and repairs claimed as an immediate deduction that are actually capital improvements.

The ATO already knows more about your rental property than most owners assume. Rental bond authorities, property managers, and short-term rental platforms all report data directly to the ATO, and it is matched against what you declare. Here is what actually triggers a closer look, and how to keep your records ready for it.

Quick Summary: What Triggers ATO Attention

  • Rental income that doesn’t match rental bond authority or property manager data
  • Interest claimed in full on a loan that was partly redrawn for private purposes
  • Repairs and maintenance claimed immediately when the work was actually a capital improvement
  • Renting to family or friends at below market rent while still claiming full deductions
  • Deductions claimed without supporting records such as invoices or bank statements
  • Short-term rental or holiday home income not declared, or ownership expenses claimed when the property wasn’t mainly used to earn rental income

1. The ATO Already Has Your Data

Three data-matching programs feed directly into rental property compliance work. The rental bond data-matching program collects bond lodgement details from state and territory rental bond authorities, covering financial years through to 2025-26. The property management data-matching program collects records from property management software providers for the same period. On top of both, digital platforms including ride-sourcing and short-term accommodation services have reported income data to the ATO since 1 July 2023, with other electronic distribution platforms reporting from 1 July 2024.

This data now pre-fills into myTax and generates nudge messages when your return doesn’t match what has already been reported. In 2026, the ATO also began sending rental data-matching letters directly to property owners, asking them to review their records and lodge amendments where their return doesn’t reflect their legal interest in the property, the periods it was rented, used privately, or rented at non-commercial rates.

See the ATO’s rental bond data-matching program protocol and its notice on sending rental data-matching letters for the full detail.

2. Interest on Mixed-Purpose Loans

Claiming the full interest on an investment loan is only correct if the loan was used entirely for the rental property. If you redrew funds from that loan for a private purpose, such as a car, holiday, or renovation of your own home, the interest on that portion is not deductible and needs to be apportioned. This is one of the most common adjustments the ATO makes on review, because loan statements make the private portion easy to identify.

3. Repairs Versus Improvements

Repairs and maintenance that restore something to its original condition are deductible immediately. Work that improves the property beyond its original condition, such as replacing an old kitchen with a substantially better one, is a capital works or capital improvement cost and must be depreciated over time instead. Owners regularly claim renovation costs as immediate repairs, and this is a frequent point of correction when the ATO reviews a return.

4. Renting to Family or Friends

If you rent your property to family or friends at less than market rent, your deductions must be limited to the amount of rent you actually charged, apportioned on a fair and reasonable basis. Claiming full deductions while charging below-market rent is a common trigger, since rental bond and market comparison data make the mismatch straightforward for the ATO to identify.

5. Short-Term Rentals and Holiday Homes

Short-term rental platforms now report income data to the ATO, so undeclared income from these platforms is increasingly easy to detect. If your property also functions as a holiday home, the ATO’s updated guidance requires it to be mainly used, or held for use, to produce rental income before you can claim ownership expenses. Our rental property deductions guide covers this test and the apportionment rules in more detail.

6. Missing or Incomplete Records

Every deduction needs a record showing what was paid, when, and why it relates to the property. The most common reason a legitimate deduction gets disallowed on review isn’t that the expense was ineligible, it’s that the owner couldn’t produce an invoice, receipt, or bank statement to support it. Keep records for 5 years from the date you lodge, longer if the deduction relates to a capital works or CGT cost base item you’ll need when you eventually sell.

Before You Lodge: A Quick Checklist

  • Check whether any part of your loan was redrawn for private use, and apportion the interest accordingly.
  • Separate any renovation costs into repairs (immediate) versus improvements (capital works, deducted over time).
  • If you rent to family or friends, confirm the rent charged matches market rates, or apportion your deductions.
  • Reconcile your declared rental income against your property manager statements and bond lodgement records.
  • If you also hold a property affected by the CGT main residence rules for couples, see our marriage and tax guide for how that exemption is shared.

Why Professional Help Matters

Getting a rental property review right the first time is far less stressful than responding to an ATO letter after the fact. ITP Accounting Professionals helps property owners keep records audit-ready and lodge with confidence.

Don’t wait for a data-matching letter to find the gaps in your records. Book a consultation with ITP to check your rental property position before you lodge.

Frequently Asked Questions

Does the ATO really check rental income against other sources?

Yes. The ATO runs ongoing data-matching programs with rental bond authorities, property management software providers, and short-term rental and ride-sourcing platforms, and cross-checks this against what you declare.

What happens if I get a rental data-matching letter from the ATO?

Review your records against your legal interest in the property and the periods it was rented, used privately, or let at non-commercial rates, then lodge an amendment if your return doesn’t match.

Can I claim full interest if I redrew some of my investment loan for personal use?

No. You need to apportion the interest so only the portion relating to the rental property is claimed; the private-use portion is not deductible.

How long should I keep rental property records?

At least 5 years from the date you lodge the relevant return. Records for capital works and cost base items should be kept longer, until 5 years after you sell the property and any relevant CGT event is finalised.

Keep Your Records Ready

The ATO’s data-matching net around rental properties has only gotten wider, covering bond authorities, property managers, and digital platforms. ITP Accounting Professionals has helped Australian property owners stay compliant and confident for decades. If you want your records checked before the ATO checks them for you, get in touch with your local ITP office.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before acting on any of these thresholds, speak with a qualified tax professional who can assess your circumstances.

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How to Lodge Your First Tax Return in Australia (2026-27 Guide)

Quick Answer:
You need a tax file number, your income and deduction records, and a myGov account linked to the ATO, or a registered tax agent. The tax-free threshold is $18,200, income above that up to $45,000 is taxed at 15%, and most people can lodge from 1 July with a due date of 31 October.

Your first tax return is simpler than it looks once you know what applies to you. Here is what a first-time lodger in Australia needs to know for the 2026-27 income year, from the tax-free threshold to what you can actually claim.

Quick Summary: First Tax Return Basics

  • Tax-free threshold: the first $18,200 you earn each year is tax-free (unchanged since 2012-13)
  • Income between $18,201 and $45,000 is taxed at 15% for 2026-27, down from 16% previously
  • Low Income Tax Offset (LITO): up to $700, reducing your tax bill further if your income is under $66,667
  • You need a tax file number (TFN) and a myGov account linked to the ATO to lodge online yourself or use a tax agent who can lodge on your behalf
  • The financial year runs 1 July to 30 June, and the standard lodgment deadline is 31 October
  • Superannuation guarantee is 12% of your ordinary earnings, paid by your employer on top of your wage

1. What You Need Before You Start

  • Your tax file number (TFN)
  • A myGov account linked to the ATO, or a registered tax agent to lodge on your behalf
  • Your income statement from each employer (usually available in myGov by mid-July)
  • Bank interest statements, if you earned interest during the year
  • Receipts or records for any work-related expenses you want to claim

2. The Tax-Free Threshold and 2026-27 Tax Rates

The tax-free threshold means the first $18,200 you earn in a financial year is not taxed at all. This threshold has stayed at $18,200 since 2012-13. If you have one employer, you should claim the tax-free threshold with them so less tax is withheld from your pay throughout the year. If you have multiple employers then you should only claim the tax free threshold with one employer otherwise you may end up with a large tax bill when lodging the return.

2026-27 resident individual tax rates (excluding the 2% Medicare levy, which most taxpayers also pay):

Taxable IncomeTax Rate
$0 – $18,200Nil
$18,201 – $45,00015%
$45,001 – $135,00030%
$135,001 – $190,00037%
Over $190,00045%

Full detail is on the ATO’s tax rates for Australian residents page.

3. The Low Income Tax Offset

If your taxable income is $37,500 or less, you get the full Low Income Tax Offset of $700, which reduces the tax you owe directly. Between $37,501 and $45,000, the offset reduces by 5 cents for every dollar above $37,500. Between $45,001 and $66,667, it reduces by 1.5 cents for every dollar above $45,000, cutting out completely above $66,667. Combined with the tax-free threshold, most first-time workers on modest incomes pay very little tax in their early working years. See the ATO’s low income tax offset page for the full taper rates.

The offset is applied automatically when you lodge, you don’t need to claim it separately. See our top tax offsets guide for other offsets that might apply to your situation.

4. Superannuation: What Should Be Landing in Your Fund

Your employer must pay superannuation guarantee contributions on top of your wage, currently 12% of your ordinary time earnings for 2026-27. This is the final step of a legislated increase from 9.5%, so 12% is expected to stay the rate going forward. From 1 July 2026, super is also paid every payday rather than quarterly, so it should appear in your fund more often and sooner after each pay run. It is worth checking your payslips and super fund statements match up, since unpaid or late super is a common first-job issue. See the ATO’s super guarantee rates page for the full rate history.

5. What You Can (and Can’t) Claim

As a first-time lodger, common deductions include work-related uniforms and protective clothing, tools and equipment needed for your job, union or professional association fees, and a portion of working-from-home costs if you work remotely. 

You can’t claim everyday clothing, travel between home and your regular workplace, or private expenses. Our work from home deductions guide covers what’s allowed if you work remotely.

6. When and How to Lodge

The Australian financial year runs from 1 July to 30 June. You can lodge from 1 July, though it is worth waiting until your income statement is marked ‘Tax ready’ in myGov, usually by mid to late July, so your figures are complete. If you lodge yourself through myTax, the deadline is 31 October. If you lodge through a registered tax agent, you generally get a later deadline, provided you’re registered with them before 31 October.

Before You Lodge: A Quick Checklist

  • Confirm you claimed the tax-free threshold with your main employer if you only have one job.
  • Wait for your income statement to show ‘Tax ready’ in myGov before lodging.
  • Gather receipts for any work-related expenses, even small ones, in case the flat deduction doesn’t apply to your situation.
  • Check your super fund statements match what your payslips say your employer should have paid.

Why Professional Help Matters

Your first tax return sets the pattern for how you handle tax going forward, and getting the basics right early, like correctly claiming the threshold and understanding what you can deduct, makes every return after it easier. ITP Accounting Professionals has helped first-time lodgers get started for decades.

Not sure where to start? Book a consultation with ITP and we’ll walk you through your first return.

Frequently Asked Questions

Do I need to lodge a tax return if I earned less than $18,200?

If your total income was under the tax-free threshold and no tax was withheld, you may only need to lodge a non-lodgment advice rather than a full return. Check with the ATO or your tax agent to confirm which applies to you.

What is the tax-free threshold for 2026-27?

The tax-free threshold is $18,200, meaning you pay no income tax on the first $18,200 you earn in the financial year. This amount has not changed since 2012-13.

Do I automatically get the Low Income Tax Offset?

Yes. The ATO applies the Low Income Tax Offset automatically when you lodge if your taxable income qualifies; you don’t need to claim it separately.

What is the superannuation guarantee rate for 2026-27?

12% of your ordinary time earnings, the final step of a legislated increase from 9.5%. From 1 July 2026, this is also paid every payday rather than quarterly.

Ready to Lodge Your First Return?

Getting your first tax return right builds good habits for every return after it. ITP Accounting Professionals has helped generations of Australians lodge their first return with confidence. If you’d like help getting started, get in touch with your local ITP office.

Disclaimer: This article provides general information only and is not a substitute for professional tax advice for your specific situation. It reflects current tax law and ATO guidance as at September 2026. Before acting on any of these thresholds, speak with a qualified tax professional who can assess your circumstances.

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