Hi – Negative gearing, CGT and trust changes have landed with a shock for many.
With shock is uncertainty — and now a month on, uncertainty has (mostly) resolved into something useful: a clearer before-and-after picture.
Property assets are the foundation of a comprehensive estate plan that can include testamentary discretionary trusts (trusts created under the terms of a will) from 1 July 2028.
First-home buyers
Before: Trying to beat off investors for the same established property — often outbid on price by buyers with deeper cash reserves and fewer conditions to be concerned with.
After: Investor competition is thinning out as new investor lending is projected to roughly halve this year. As investors step back low-deposit pathways are doing more work with buyers no longer up against the cashed-up ones for the same homes. So what are my main deposit options?
- 5% Government Scheme — buy with a 5% deposit, no Lenders Mortgage Insurance, backed by a government guarantee. No income or price caps currently applying.
- Family Guarantee (0% deposit) — a family member’s equity or savings stands behind the loan instead of cash, letting eligible buyers enter with no deposit of their own.
- $1k low-deposit options — select lenders now accepting as little as $1,000 down for eligible borrowers, effectively removing the deposit hurdle entirely.
The trade-off: With the entry-level market cost aware buyers are coming onboard making this the fastest-growing price bracket right now – this lack of competition may not last.
With more ways in and less competition today the time now is better than it’s likely to be in six months. Stop waiting for the “right” moment — the main risk now is timing, not access. (Eligibility, lender criteria, and loan servicing requirements vary by scheme — worth a conversation with us to confirm which option actually fits, not just which sounds cheapest.)
Existing investors
Before: One default playbook — buy property, negative gear it, use tax savings to boost borrowing capacity, bank the 50% CGT discount on sale.
After — right now: The law comes into effect next year. Here’s the part not everyone realises: some lenders are still using negative gearing in their servicing calculations, while most have already moved to the new rules ahead of legislation actually passing. That gap matters — it can be the difference in how much you’re able to borrow today. Worth a conversation with a broker now, while that gap still exists, to see where you actually stand rather than assuming the worst-case rules already apply to you.
After — once legislation lands: From 1 July 2027, the calculus shifts for anything bought after
1 of 3 budget night. Established property loses the old tax benefits; new builds keep them in full — full negative gearing, full 50% CGT discount, no change. That makes new build the more durable long-term play for anyone still accumulating, while existing holdings from before budget night stay untouched either way.
The move: anything already held or under contract is unaffected regardless. For new purchases, the near-term opportunity is in the lending gap — and the medium-term opportunity is in shifting focus toward new builds before the old rules close off for established property altogether.
SMSF – curious investors
Before: SMSF property was a niche, often overlooked structure — negative gearing outside super looked simpler and just as effective, so most people never looked twice at buying property through super.
After — right now: SMSFs are still the only structure keeping full negative gearing and a meaningful CGT discount completely untouched by the reforms — including borrowing to fund the purchase. But that door is closing on a clock, not a calendar guess: once the legislation receives royal assent, there’s a 45-day window to complete any new SMSF borrowing transactions before the ban takes effect. Anything not settled inside that window falls under the new no-borrowing rules.
After — once the window closes: SMSF property remains structurally advantageous — full negative gearing and the one-third CGT discount stay in place — but only for cash purchases. Leveraged entry, the version that let people build a larger property inside super without a full cash outlay, is gone for anyone who doesn’t act inside the transition window.
The move: if borrowing inside an SMSF is even on your radar, this is the moment to have that conversation — not because of hype, but because the 45-day window is a hard, one-off deadline, not an ongoing opportunity.
Everyone else, watching prices
Before: A market that looked set to either boom or crash, depending on who you asked.
After: Neither. Migration-driven demand is offsetting the investor pullback, which is why prices have stalled rather than fallen significantly. The market isn’t shrinking — it’s redistributing between new builds, super, and first-home entrants.
The takeaway: nothing here is a “wait and see” moment. Each group now has a clearer set of doors than they did a month ago — the only question is which one to walk through.
When you die – Trusts or not?
Also don’t forget to review existing wills (particularly those with testamentary trusts), for genuine asset protection and family succession objectives and not just income splitting purposes. Details are evolving subject to consultation with implications for estate planning as indications suggest a narrowing of the circumstances in which testamentary trusts will continue to receive concessional tax treatment. There are as a consequence far-reaching implications for traditional will drafting practices and existing estate plans.
Love to chat about everything property.
Kelvin Mason
From $1,000 to Homeowner – Own your Home, Build your Wealth 0477 555 014 – 0480 090 669 – Credit License 555044 – JP
P.S. Got ATO debt and you’re a company director? Before you refinance to pay it off, there’s one question worth asking yourself — because paying it off the wrong way can cost you more than the debt itself. [Read the full breakdown here →]
