Australian Property Tax Reforms
What Investors Need to Know in 2026 and Beyond
Trust Tax Reforms: A New Era for Family Trusts
One of the most discussed measures is the proposed introduction of a 30% minimum tax rate on discretionary trust income from July 2028.
Historically, many investors have used family trusts to distribute income among beneficiaries, often reducing the overall tax burden by allocating profits to family members on lower tax brackets.
Under the proposed reforms, trusts would be required to pay a minimum 30% tax before distributions are made. While higher-income families may receive refundable tax credits that offset some of the impact, many lower and middle-income families could lose the flexibility that has traditionally made trust structures attractive.
“For many Australians, trusts have been an effective wealth-building vehicle for generations. These proposed changes may require investors to rethink how they structure their assets and income moving forward,” says Sophia Wang, Founder of Black Swan Property Group.
Tax specialist Jimmy Sang explained during Black Swan’s recent investor masterclass that many investors may eventually consider alternative ownership structures, including companies, depending on their circumstances. However, investors should avoid making rushed decisions.
Important Exemptions
Several structures are currently expected to remain exempt from the proposed minimum trust tax, including:
- Fixed trusts
- Self-Managed Super Funds (SMSFs)
- Existing testamentary trusts established before 12 May 2026
- Certain primary production family trusts
A transitional CGT deferral period of up to three years has also been proposed, allowing investors additional time to restructure where appropriate.
The End of Negative Gearing for Secondhand Properties?
Another major reform proposal is the restriction of negative gearing benefits for secondhand residential properties from 1 July 2027.
Under the proposed changes:
- Existing investments will be grandfathered until 30 June 2027.
- Brand-new residential properties will continue to qualify.
- Commercial properties, shares, and other asset classes remain unaffected.
This policy aims to encourage investment into new housing supply while reducing competition for established homes.
“”We’ve already seen a noticeable increase in investor demand for new developments and off-the-plan opportunities since these reforms were announced,” says Sophia Wang. “Investors are looking ahead and recognising where future tax advantages may remain.”
For property investors, this creates a significant distinction between new and established properties.
Investors purchasing qualifying new developments may continue to access both negative gearing benefits and depreciation allowances, potentially creating stronger after-tax returns compared to established homes.
Capital Gains Tax Changes: Rewarding Long-Term Investors
The government has also proposed significant changes to how capital gains tax discounts are calculated.
Currently, individuals generally receive a 50% CGT discount on assets held for more than 12 months.
Under the proposed framework:
- Assets acquired before 1 July 2027 will largely retain existing treatment.
- Assets sold after the reforms commence may require gains to be apportioned between pre-reform and post-reform periods.
- CPI indexation methods may become available for longer-term holdings.
This creates additional complexity for investors, particularly those holding multiple properties over extended periods.
Property owners may require formal valuations as of 30 June 2027 to establish future CGT calculations.
“The reforms appear designed to encourage long-term ownership rather than short-term trading. Investors who focus on quality assets and long-term growth may still be well positioned,” Sophia explains.
How Lending Capacity May Change
While tax policy often attracts headlines, one of the less discussed consequences is its impact on borrowing capacity.
Banks assess serviceability based on an investor’s expected income and tax position. If negative gearing benefits disappear for secondhand properties, lenders may reduce borrowing capacity because investors can no longer rely on those tax deductions to support servicing calculations.
This could make it more difficult for investors to finance established properties while increasing demand for qualifying new developments.
As a result, many lenders and developers are already adapting to changing market conditions
Why New Developments Are Becoming More Attractive
As policy settings shift, many investors are reassessing the role of new property developments in their portfolios.
Beyond retaining access to negative gearing and depreciation benefits, many developers are introducing attractive buyer incentives, including:
- Vendor finance solutions
- Reduced deposit requirements
- No Lenders Mortgage Insurance (subject to eligibility)
- Fixed-rate finance incentives
- Rental yield support programs
- Referral and exchange deposit incentives
At Black Swan Property Group, our focus has always been identifying quality projects from reputable developers that align with long-term market fundamentals.
“Our strategy has never been about chasing short-term trends. We partner with established developers because quality assets, strong locations, and sound fundamentals continue to drive results regardless of market cycles,” says Sophia Wang.
The company works closely with leading developers across Sydney, Melbourne, Brisbane, and Canberra, helping clients access projects that meet both lifestyle and investment objectives.
Brisbane and the Gold Coast Continue to Gain Momentum
Another key theme discussed during the masterclass was the continued growth of South-East Queensland.
With infrastructure investment accelerating ahead of the 2032 Olympic Games and housing supply remaining constrained, both Brisbane and the Gold Coast continue to attract attention from investors nationwide.
Population growth, employment expansion, and major transport upgrades are creating long-term demand drivers that support capital growth prospects.
“We’re seeing strong interest from investors who recognise the long-term fundamentals in Brisbane and South-East Queensland. Infrastructure, population growth, and housing demand continue to create compelling opportunities,” Sophia notes.
Should Investors Restructure Now?
Despite the widespread discussion surrounding the reforms, experts urge caution. The proposed measures have not yet been fully legislated, and important details remain under consultation. Potential stamp duty implications, restructuring costs, and future legislative amendments could all affect outcomes.
Jimmy Sang’s recommendation to investors was clear: seek professional advice before making structural changes.
“Every investor’s circumstances are different. The right structure for one family may not be the right structure for another. That’s why personalised tax and accounting advice is essential before making any major decisions,” says Sophia Wang.
The Bottom Line
Australia’s property investment environment is evolving.
While the proposed trust tax reforms, negative gearing changes, and CGT adjustments may create challenges for some investors, they also create opportunities for those who understand the new landscape.
Investors who stay informed, seek professional advice, and focus on quality assets may be better positioned to navigate the changes successfully.
At Black Swan Property Group, we remain committed to helping clients understand market developments, identify strategic opportunities, and build long-term wealth through property.
As legislation continues to evolve, education and expert guidance will become more valuable than ever.
Need Guidance?
If you’d like to understand how the proposed tax reforms could affect your property strategy, speak with the Black Swan Property Group team or consult with your accountant or tax adviser before making any investment or restructuring decisions.
Disclaimer: This article is for general information purposes only and does not constitute financial, taxation, or legal advice. Tax legislation is subject to change, and investors should seek independent professional advice regarding their individual circumstances.
Get
We would like to hear from you.