This Tax Reform Is Nothing Like Australians Think. 55 Questions Exposed Why | APS150

After the Budget dropped, I jumped straight into a live stream, then followed up with a long-form video on Wednesday, breaking down the tax reform provisions with case studies. My plan for this episode was to pull out the mathematical model we’ve been building to help you work out the best outcome with hard numbers. But the sheer volume of questions told me we need to clear the air first. I merged similar ones together, tried to cut the list down, and there are still over 50 that deserve a proper answer. So today, we’re going to work through all of these, put your mind at ease, and then next episode, we’ll dig into the numbers and the modelling. Let’s get into it.

Part 1: CGT — Transitional Rules and Calculations

Q1: How is the capital gain split before and after 1 July 2027? Is the inflation adjustment based on one year’s CPI or cumulative?

It’s a dual-track, split-period calculation. The portion after 1 July 2027 uses a CPI index, specifically the All Groups CPI, the headline number you see on the news all the time. It covers everything, so when fuel prices go up or come down, that feeds straight into it. That’s a completely different measure from the Trimmed Mean CPI that the Reserve Bank looks at for underlying inflation.

Now here’s the bit most people get wrong. Inflation is a percentage, but the index is just a number. Say 2025 starts at 100. Inflation comes in at 3%, the index goes to 103. Another 3% in 2027, and you end up at 106.09, not 106, because it compounds rather than simply adding up. In plain English, the index already has the compounding baked in, which actually makes the maths simpler to work out.

For the gain that builds up before 1 July 2027, if you’ve held the asset for over 12 months, you still get the 50% CGT discount. Under 12 months, no discount. After 1 July 2027, all CGT assets switch over to the indexation method, and that includes shares, commercial property, and crypto. The only exception is brand-new residential property, where you get to pick whichever method works out better: the 50% discount or indexation plus a 30% minimum tax rate.

And that 30% minimum is the part you need to pay attention to. It means anyone whose marginal tax rate sits below 30% actually ends up worse off. The old trick of selling in a low-income year to keep your tax bill down doesn’t work anymore. A smarter move would be to set up an SMSF in that low-income year, put in your unused concessional contributions, and only pay 15%. That’s a huge saving.

Q2: If my property loses value after 1 July 2027 and I sell below the valuation date price, how does CGT work? Can the loss be used as an offset?

The Budget papers don’t spell this out, but the pre-1999 rules will most likely carry over. If the sale price lands somewhere between the original purchase price and the inflation-indexed value, there’s no tax and no refund. If you sell below your original contract price, that’s a capital loss you can carry forward to offset future gains on other assets in the same entity. So it’s not money gone forever, it’s sitting there waiting to be used.

Q3: What if price growth comes in lower than inflation, or there’s actual deflation?

Very similar to the one above. Growth lower than inflation means no tax and no refund. As for deflation, honestly, I don’t think we’ll see it happen, and the Budget doesn’t deal with it either. The pre-1999 rules say the index can’t drop below 100, so your cost base won’t get pulled down by deflation. Bottom line: you can’t squeeze any tax advantage out of it.

Q4: How is the property value on 1 July 2027 worked out? Who does the valuation?

You only need to sort this out in the year you sell, not on 1 July 2027 itself. The safest approach is to bring in a third-party licensed valuer. Whether a real estate agent’s appraisal would count isn’t covered in the Budget, but I’d say it probably won’t. If it did, you’d have valuations all over the place. The ATO will also roll out an online calculator that works off the asset’s average growth rate over the holding period.

Q5: If indexation (inflation) only runs at 2% a year, after 5 years, that’s only about 10%. Wouldn’t you actually end up paying more tax?

Quick correction first: five years of 2% inflation doesn’t add up to 10%, it compounds to 10.41%. The answer comes down to the gap between your growth rate and inflation. CBA has put the breakeven at 4.8%. Their exact words: “With a 10-year holding period, indexation is equivalent to the 50% CGT discount with annual price growth around 4.8%.” So if your property grows faster than 4.8% a year, you’ll pay more tax under indexation. Detached houses typically come in at 6–7% annual growth, so yes, the tax bill goes up. Apartments, where growth is slower, would pay less.

Now that might sound like good news for apartments, but don’t fall into that trap. Earning less and paying less tax still means you’re earning less. Earning more and paying a bit more tax still means you pocket more at the end of the day. The only benchmark that matters is the net return across the entire investment lifecycle. That’s it.

Q6: If new builds can still use the 50% CGT discount, why offer indexation at all? When would indexation be the better deal?

New-build investors get to pick whichever method gives them the better result. You don’t need to lock anything in now. You work it out when you sell.

Indexation wins when capital growth roughly matches or falls below inflation. Once you strip out the inflation component, the real gain is tiny, so you’d end up with a lower tax bill than you would under the 50% discount method. This becomes especially noticeable in high-inflation environments. When growth runs well above inflation, the 50% discount is generally better. I’ll walk you through the full calculations and model scenarios next episode.

Q7: If I buy in August 2026 and sell in September 2027, crossing the date the new rules kick in, does the pre-changeover gain still get the 50% discount?

First, a correction. To enjoy 50% discount, you’d have to hold the property for over 12 months; the scenario does not apply. Same for the indexation after 1st July 2027. Now, let’s assume that you buy now and sell in 2030. Then Yes. The dual-track calculation covers all assets bought before 1 July 2027 and sold after that date. The gain that was built up to 1 July 2027 still gets the 50% discount. The gain from 1 July 2027 to your sale date is subject to indexation plus the 30% minimum.

Q8: Does the CGT reform actually hurt long-term investors that much?

It does have an impact, but it hasn’t cracked the rule that long-term holding is the way to go in Australian property. For detached houses, inflation typically makes up well under half of total capital growth, which means the old 50% discount was actually over-compensating. Under the new system, you’ll hand over more in tax. For apartments, inflation often accounts for close to or over half of total growth, so the new system could break even or even work out slightly better. But here’s the thing that hasn’t changed: even with detached houses paying more tax, they still come out far ahead of apartments in total returns. The fundamentals haven’t shifted.

Q9: You don’t pay CGT if you lose money, but any profit gets taxed at minimum 30%. Is that right?

Right direction, but the numbers need correcting. Losing money on property means no tax. That rule hasn’t changed. But “any profit, minimum 30%” isn’t quite accurate. The 30% floor applies to the real capital gain after indexation strips out inflation, not the nominal gain. If inflation accounts for the entire gain and the real gain is zero, there’s no CGT to pay. Anyone with a marginal rate at 30% or above, that’s income over $45,001, isn’t affected by this floor at all. And people on income support like the Age Pension or JobSeeker are completely exempt from the 30% minimum rule.

So now we’ve gone through how the numbers actually stack up under the new CGT system. Let’s move on to the question that came up over and over again in the comments: what actually counts as a “new build”?

Part 2: What Counts as a “New Build”?

Q10: If I knock down an old house and rebuild, does that count as a new build?

It comes down to whether you’ve bumped up the number of dwellings. If you knock down one and build two or more, like turning a house into a duplex, that counts as a new build. If you knock down one and rebuild just one, it doesn’t count. And a granny flat doesn’t count either.

Q11: Does it have to “increase supply” to qualify? What about rebuilding just one on the same site?

Yes, you must increase the supply. A one-for-one replacement on the same site doesn’t make the cut.

Q12: Old house on a big block, no subdivision, I just build more dwellings on it. How does that work?

The Budget papers don’t directly cover this scenario. Going by the “increase supply” principle, I still don’t think it would qualify, because even a granny flat doesn’t get through. But there’s no official ruling on this yet.

Q13: Demolish, subdivide, build two or more. Does each one get new-build benefits? Could the ATO treat it as a development business and hit me with GST?

Knocking down one and building two or more ticks the supply requirement, so all the new dwellings should qualify as new builds. But only you, as the first owner, get the new-build treatment. The next buyer can’t claim it. On the GST risk: if you’re knocking down, subdividing, and building multiple dwellings to sell, the ATO might look at that and classify you as carrying on a business. That could bring GST and income tax into play, depending on the scale, how often you’re doing it, and your intent. Talk to your accountant on that one.

Q14: Someone, not a builder, builds a home, lives in it for a year, then sells it to me. Am I buying a new build?

Very likely not. If they’ve lived in it for over 12 months before selling, no new-build status gets passed on. But if they sell within 12 months and the construction increases the dwelling count, not just a one-for-one replacement, then it does qualify, and you can still access the 50% discount and negative gearing.

Q15: I bought vacant land years ago, built an investment property, and it’s been rented out. If I sell after 1 July 2027, can I still get the 50% CGT discount?

Yes. You built a new dwelling on vacant land as the first owner. That fits the Budget definition of a new build. You can pick whichever CGT method works out better.

Q16: Bought land from a developer, building the house myself. New build?

Yes, it is. A new dwelling on vacant land ticks the box. You’re the original investor, so you get negative gearing and the choice of CGT method. But once you sell, the next buyer doesn’t get those benefits.

Q17: I bought a brand-new property back in 2018 or 2024, it’s settled and rented out. Does it still count as a new build?

You’re the first purchaser. As long as you haven’t sold, it still qualifies as a new build under the Federal Budget definition.

Q18: Bought land a few years ago, planning to build next year. Will the house count as a new build?

Yes, it does. You’re building a new dwelling on vacant land, and you’re the first purchaser, so it qualifies as a new build.

Q19: Is anything bought from a builder automatically a new build?

If it’s bought from a builder, it’s a brand-new construction, and you’re the first buyer, then yes, that counts. But it doesn’t count if the builder lived in it for over 12 months before selling, or if they knocked down one and rebuilt one without adding to the supply.

Q20: I’ve got two new-build investment properties rented out. When I sell, can I pick the best CGT method for each one separately?

If you’re the first purchaser of both, yes. You choose the best method for each property on its own, and you make that call at the time of sale, not in advance.

OK, If this is already making you rethink your strategy, drop a comment below with your situation. I read every single one, and the most common ones will go into the next video. So now you know what counts as a new build and what doesn’t. But many people also asked what happens when you switch a property from living in it to renting it out. Let’s clear that up.

Part 3: Converting Between Home and Investment

Q21: If I convert my home into an investment property, can I claim negative gearing?

It has nothing to do with whether it was your home. What matters is when you bought it, whether you held it before Budget Night, and whether it’s a new build.

If you owned it before Budget Night and converted it to an investment, you can keep claiming negative gearing for as long as you hold it, whether it was new or second-hand when you bought it. If you bought after Budget Night and it’s a new build, negative gearing still works indefinitely. If it’s second-hand and you bought between Budget Night and 30 June 2027, you can negatively gear during that time window, but it gets cut off from 1 July 2027. If you bought a second-hand property on or after 1 July 2027, negative gearing is off the table from day one.

Q22: I bought my home 10 years ago, converting to investment next year. Can I still offset my wages?

Same principle. You owned it before Budget Night, so grandfathering kicks in. Yes, you can still negatively gear against your wage after converting.

Q23: Sell my home before July next year, then turn my investment property into my home. What are the tax implications?

Selling your principal place of residence doesn’t trigger CGT. For the investment property you’re converting, the gain during the investment period gets calculated separately. Whatever rules applied during that period still apply. If the investment period spans 1 July 2027, you get the 50% discount on the gain before that date, and indexation rules on the gain after.

Q24: Buy a new build now to live in, later switch it to an investment. Negative gearing forever?

If it’s a new build, there’s no negative gearing while you’re living in it because that only applies to investment use. Once you switch it to investment, you can claim negative gearing for as long as you hold it.

Q25: Joint ownership with spouse, divorce, one person takes sole ownership. How do the new rules affect this?

The Budget papers don’t cover this. You’d just follow existing tax law as it stands.

Now here’s where things get really interesting. A lot of the questions that came in are about holding structures, trusts, companies, and super funds. And honestly, this is where the Budget changes bite the hardest. I’m not saying trusts are dead. But I am saying the risk profile has shifted dramatically, and if you don’t look into this now, it could cost you a lot of money.

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Part 4: Holding Structures — Trusts, Companies, and SMSFs

Q26: Is the 50% CGT discount completely gone for discretionary trusts, replaced by a flat 30%?

Not completely gone. It’s a phased transition. Growth up to 1 July 2027 still gets the 50% discount. Growth after that falls under indexation plus the 30% minimum. If the property is a new build, you can still choose which rules to use.

Now here’s the critical bit, and this is the part that most people are getting wrong. There are two different “30%” figures floating around and you need to keep them straight. The CGT 30% minimum tax from 1 July 2027 is a floor rate on real capital gains. The trust 30% minimum distribution tax from 1 July 2028 is a trustee-level tax on distributed income. These are two separate reforms. Don’t mix them up. Both can apply at the same time.

When you work out CGT on a trust-held property, looking at the trust level alone doesn’t tell the whole story, because gains ultimately flow through to either individual or corporate beneficiaries. After 1 July 2028, corporate beneficiaries get hammered. The trust pays 30% on the real gain, then the company pays again, pushing the effective rate to at least 55%. If the company then distributes to individuals, the combined rate could go as high as 62.9%. So the bucket company strategy is basically finished, and there’s no way to make it work under the new rules.

For individual beneficiaries, the minimum is 30% on real gains, the maximum is whatever their marginal rate happens to be. For anyone whose marginal rate sits below 30%, this pulls their combined rate up to match the company rate. If a company has passive income under 80% and turnover under $50 million, it only pays 25%, which means a trust could actually end up worse off than a company on tax. I’ll go through the detailed numbers in the next episode.

Q27: Does the trust 30% minimum hit retired couples hard? If the beneficiary’s marginal rate is below 30%, do they end up paying more?

Yes, they could end up paying more. Previously, a family trust could distribute income to lower-taxed members, like retired parents whose rate might sit at 15%, dropping to 14% in 2 years. The whole family paid less overall. Under the new rules from 1 July 2028, no matter who gets the distribution, the trustee pays 30% first. The recipient then gets a tax credit for that amount and can use it to offset their personal tax.

Here’s where the problem is: that credit is non-refundable. If your personal rate is 14% but the trustee already paid 30%, the 16-percentage-point gap is gone. The government won’t give it back. You’ve effectively been forced to pay at 30%, well above what you’d otherwise owe.

Do Age Pension recipients get an exemption? There is one, but you need to be clear about which “30%” it covers. The Budget’s exemption only kicks in for the CGT 30% minimum when an individual personally sells an asset. It does not apply to the trust’s 30% minimum distribution tax. If the income comes through a family trust distribution, there’s no exemption. The trustee still pays the 30%, and the excess credit doesn’t get refunded. I have to say, the financial planning industry is probably in for a serious rethink on this.

Q28: If I restructure from a trust to a company during the three-year window, is stamp duty waived too?

Federal rollover relief does not cover state-level stamp duty. The federal side lets you off income tax and CGT. But at the state level, transferring the asset is treated as a property transfer and stamp duty kicks in. No state or territory government has said they’ll waive it either. So the honest answer is: we don’t know yet.

Q29: After the trust pays 30% and distributes to low-rate family members, is property investment under a trust still worth doing?

Still doable, but less efficient. Low-rate beneficiaries carry a higher overall tax burden under the new rules.

But here’s the thing most people are missing. The Budget papers actually point to a way around it: instead of distributing profits, pay wages. Why does this work? Because the 30% minimum hits the trust’s profit, not its revenue. Wages are a cost. The higher your wage bill, the lower your profit, and the smaller the base that 30% applies to. Take it to the extreme: if all income goes out as wages, the trust’s profit is zero, and the 30% tax drops to zero with it.

But there’s a big catch. The family members must actually be doing real work in the business, and the wages need to be reasonable. Otherwise the ATO will treat it as a sham arrangement. On top of that, paying wages brings additional costs like super contributions and payroll tax, and the business needs to be genuinely operating. So this isn’t a silver bullet, but for families that genuinely run a business, it’s the clearest legitimate path right now.

One critical point though: this only works for operating income, not capital gains. Property capital growth absolutely cannot be shielded this way.

To sum it up in one sentence: there are ways to deal with it, but the tax burden will still come in noticeably higher than under the old policy. You can use the wages strategy to soften the blow, but a company structure is simpler and cheaper to run. I think plenty of people will end up restructuring, because sometimes the simplest approach is the best one.

Q30: What are my options for moving a family trust to a different holding structure?

Two main options. First, restructure into a company, which gets you the 25% small business rate. The transfer is exempt from income tax and CGT under rollover relief, but stamp duty may still apply. Second, keep the trust and shift to a wages-based distribution model, though the upside is limited. You don’t need to do anything right now. Wait for the legislation to go through, then talk to your tax professional. There’ll be plenty of time.

Q31: Have the SMSF rules changed? Is there CGT when a super sells?

Nothing has changed for SMSFs. They keep running under existing rules. That part of the system is completely untouched.

Q32: If companies are least affected, how hard is it to get a loan through one?

Company investment property loans typically come with tougher requirements: bigger deposits, higher rates, more paperwork. Companies never had the 50% CGT discount, so the CGT changes don’t apply to them at all. But companies never had negative gearing. Losses will be locked in the company. The advantage is the flat 25% or 30% company rate when your personal marginal rate is higher. Which entity to use going forward is something I’ll lay out in the next episode.

Q33: How do you actually go about restructuring a trust into a company?

There are plenty of practical hurdles. My advice is to take it step by step. Right now, between May and August 2026, don’t do anything. Just gather information and run scenario modelling. Wait for the Exposure Draft, expected around June to September, and go through the fine print. According to Treasury data, roughly 60% of affected trusts may not need to pay additional tax or restructure at all. If restructuring does turn out to be necessary, carry it out within the rollover relief window from 1 July 2027 to 30 June 2030, but iron out the stamp duty question before you pull the trigger.

Part 5: Negative Gearing — The Fine Print

Q34: If I can’t negatively gear a second-hand investment property, do I still have to pay tax on rental income?

Yes, rental income is still taxable. The reform only changes where you can apply the loss. If your rental income tops all your holding costs, you’ve got a net profit on paper, and profit means tax. That hasn’t changed.

Q35: Does a granny flat in the backyard qualify for negative gearing?

A granny flat doesn’t count as a new build. But if the main dwelling was already held before Budget Night, grandfathering protection stays in place for the entire property, granny flat included.

Q36: Existing properties can still be negatively geared, new builds too. So has much really changed?

For anyone who already owned investment property before the Budget, whether it was new or second-hand when they bought it, there’s zero change to negative gearing. There’s some impact on future second-hand buyers, but older properties already had fairly modest negative gearing benefits to begin with. The Budget data backs this up: over half of negatively geared properties are either sold or turn cash-flow positive within four to five years, and over 75% flip to positive within ten years.

So far, we’ve gone through how the numbers work and which structures are affected. Now for the question I got asked more than any other: are new-build buyers actually the winners here, or is that just what people want to believe?

Part 6: Are New-Build Buyers Really the Winners?

Q37: Once a new build gets resold, it becomes second-hand. The buyer pool shrinks. Are new-build buyers really winning?

You need to look at this from both sides. First-hand buyers get negative gearing the whole time they hold, and when they sell they can pick the better CGT method. Compared to second-hand, they’ve got the full tax advantage and more flexibility.

But the real question underneath is: will new builds appreciate more slowly because second-hand demand drops? I call this kind of thinking “single-variable analysis,” where you find one negative and use it to write off the whole picture. Property investment serves many goals: returns, tax savings, security, wealth transfer, retirement planning. This question only touches on one of those. On top of that, there are 32 factors that drive property prices, including the Golden 11 Rules and the Golden 21 Rules. Picking out one factor and declaring new builds are a bad investment has no basis. Even on tax alone, the answer isn’t clear-cut. In over 90% of our modelled scenarios, new builds come out ahead. I’ll break that down in detail next episode.

Q38: After an off-the-plan property settles and I sell, the next buyer can’t get new-build benefits. Will anyone want to buy it?

The buyer pool shifts a bit, but “nobody will buy it” is not a real scenario. Owner-occupiers aren’t affected. SMSF buyers aren’t affected. Trust and individual investors will think about it, but the real question is how much that calculation actually moves the needle on their decision. I’ll show you in the next video. But here’s a quick preview: under different growth rates, inflation levels, holding entities, and time frames, the tax differences are real, but they’re nowhere near as big as you might be imagining.

Q39: Won’t investors pile into new builds and push prices up? Are the real winners the builders and developers?

Builders and developers are among the direct beneficiaries, but there are constraints. The construction industry is capped by labour shortages and materials costs, so supply can’t ramp up overnight. If prices get pushed too high, yields come down, investors pull back, and prices soften again. New builds that were set to go up in value will still go up. There may be a short-term acceleration, followed by a return to normal growth rates.

Q40: Could there be an oversupply of new builds? And if nobody wants to sell second-hand, what happens to prices?

Short-term oversupply is very unlikely. Supply is held back by land approvals, developer margins, and labour, and there’s no sign of construction ramping up in the next three to five years. As for “nobody wants to sell second-hand,” that’s not a serious way to frame a question. You’d need to spell out where exactly you think the oversupply would happen, what your definition of oversupply is, and which property types and geographies you’re talking about. You need a bit of context before jumping to conclusions.

Now, a lot of people also want to know what all of this means for rents and prices on the ground. Let’s get into that.

Part 7: Impact on Rents and Prices

Q41: Will rents go up after the new policy?

Treasury is predicting the impact will be minimal, less than $2 per week. My personal view is different: I believe rents will pick up speed. The logic is straightforward. Nobody wants to be out of pocket. If landlords’ returns get squeezed, they’ll put up the rent. That’s just how it plays out.

Q42: For owner-occupier buyers, is this good news or bad?

It’s clearly positive. If investor demand for second-hand property eases even slightly, that frees up room for owner-occupiers to step in. Owner-occupiers aren’t touched by negative gearing or CGT reform at all. But let’s be realistic: just because investors aren’t buying a particular property doesn’t mean you can suddenly afford it. And investor demand for second-hand probably won’t drop dramatically anyway.

Q43: Does the new policy put downward pressure on high-end prices and boost mid-range and entry-level?

The Budget papers don’t break it down by price segment. The negative gearing changes hit high-marginal-rate taxpayers harder, but right now, investment activity is concentrated in entry-level second-hand properties and house-and-land packages. The real drivers aren’t about whether a property is high-end or not. What matters is the growth rate, inflation, your marginal tax rate, and how long you plan to hold. I’ll lay that out next time.

Q44: Will heritage-listed homes lose more value?

The Budget doesn’t touch on this directly. Heritage homes are typically long-established properties, which means they fall under the negative gearing rules, and you can’t knock them down and rebuild. Investor appeal goes down. But the core buyer group for heritage homes is owner-occupiers, so the direct hit shouldn’t be major.

Q45: If all my properties are positively geared, is holding forever the best strategy?

In many cases, yes. Positive cash flow means the negative gearing restrictions don’t touch you. Not selling means CGT never gets triggered. Properties held before Budget Night have grandfathering protection. But “best” comes down to opportunity cost, maintenance, life plans, and where interest rates are heading.

Q46: If landlords can’t negatively gear, they push up rents, and tenants end up paying for it. Right?

Exactly right. I expect rents will go through an accelerated growth phase.

Part 8: The Six-Year Rule

Q47: Does the new policy affect the six-year rule?

No. The six-year rule is completely untouched. It stays exactly as it is.

Q48: Bought before Budget Night, interest is deductible. If I refinance after 1 July 2027 and borrow more, is the extra interest still deductible?

Deductibility depends on what the money is used for. If the extra borrowings go towards investment purposes, the interest is deductible, but if they’re used for personal purposes, it’s not. For properties bought before the Budget, the negative gearing rules haven’t changed.

Part 9: Other Asset Classes

Q49: Do the new CGT rules apply to shares, funds, bonds, gold, and crypto?

Yes. The CGT reform applies to all CGT assets across the board, not just property.

Q50: Does the new system apply to savings interest?

No. Interest on savings is ordinary income, not a capital gain, so it’s a completely different category.

Part 10: Will the Budget Actually Pass?

Q51: The Budget hasn’t cleared the Senate. Could it fail or get amended?

It’s possible. All three major tax reforms are still at the proposal stage. Nothing is locked in yet.

Q52: If the government changes at the next election, could this get reversed?

Absolutely possible, and international precedent backs that up. New Zealand’s Ardern government took away interest deductibility for residential investment properties in 2021. The Luxon coalition brought it back, 80% from 1 April 2024, 100% from 1 April 2025, at a four-year fiscal cost of roughly NZ$2.9 billion. In Canada, the Trudeau government proposed bumping the capital gains inclusion rate from 50% to 66.67% in 2024. It got deferred in January 2025, then formally scrapped by the new Prime Minister Carney on 21 March 2025. The inclusion rate stays at 50%. So yes, these things can absolutely be undone.

Part 11: Other Technical Questions

Q53: Is second-hand property development still worth doing under the new rules?

It comes down to the model. Renovating without adding dwellings doesn’t qualify as a new build, so the new CGT rules apply, but development profit is primarily driven by margins, not negative gearing. Knocking down one and building two or more qualifies as a new build with full tax advantages. If the ATO classifies your activity as carrying on a business, the profit gets treated as ordinary income and the CGT reform doesn’t directly apply. The bottom line is this: the driving force in development has always been the margin, and the negative gearing restrictions have a relatively minor effect on that.

Q54: Holding for more than a year isn’t even worth it anymore. I’d be better off putting my money somewhere else. Right?

That’s dead wrong, and here’s why. CGT can still be brought down through indexation, so you don’t automatically pay more tax than you did before. And even if you do pay a little more in tax, you’ve also earned more. In Australia, for an ordinary person, there is no other investment that gives you this level of return with this level of low risk and four-times leverage. You’ve already made good money. If the government takes a slightly bigger slice, so be it. When you run the numbers from end to end, property still comes out ahead of the alternatives.

Q55: Is financial freedom through property no longer possible? Has the underlying logic been fundamentally changed?

The underlying logic has been adjusted, but it has not been overturned. And that distinction matters.

What has changed: the traditional approach of high leverage plus high tax rates plus negative gearing is less efficient for new investors entering the second-hand market. That path has gotten harder.

What hasn’t changed: property is still an asset you can borrow against, and that borrowed money still amplifies your returns. Your home is completely CGT-exempt, making it the strongest tax shelter you can get. New-build investment properties still enjoy the full suite of tax benefits. SMSF property investment is completely exempt from these reforms. The three-layer return structure of rental income, depreciation, and capital growth is still intact. And the supply-demand fundamentals of Australian housing have not shifted.

Under the new framework, the most tax-advantaged investment target is a brand-new house-and-land package. The best structure is a self-managed super fund. And while you’re not yet in a position to buy through an SMSF, you can start building your portfolio under a trust, a company, or your own name right now.

In the next episode, I’ll dig into the model and the numbers to help you find the optimal strategy under this new policy. Make sure you come back for that one.

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Our Flagship Service: VISION Membership. Your One-Stop Property Investment Manager – Build a Tailored Portfolio and Achieve Financial Freedom

Whether you're an employee, a professional, a business owner or even a new migrant, everyone has a financial goal for the future. The VISION Membership is designed to solve all the pain points in your Australian property investment journey through one single, comprehensive service.

By analysing your current financial situation and long-term goals, we'll tailor a property investment plan just for you. Our team will match you with the ideal mortgage structure, tax strategies, wealth planning, and legal support, empowering you to go further, faster, and smarter on your path to financial freedom.

VISION Membership is perfect for busy individuals who want a professional team to create, expand and manage their Australian investment portfolio. If you're looking for a dedicated team, including real estate investment experts, mortgage brokers, accountants, financial planners, and property solicitors, VISION Membership is your ideal solution.

Start with an obligation-free 30-minute discovery session on Zoom. BOOK NOW.

VISION Buyer’s Agent

No time for inspections? Tired of dealing with pushy selling agents? Unsure how much to offer or feeling nervous about auctions? Worried about buying the wrong property? If any of these sound like you, AusPropertyStrategy's Australia-wide VISION Buyer's Agent Service is here to help.

We provide end-to-end support to help you build an optimised property portfolio and achieve your financial goals—whether you're investing interstate, refinancing, or planning post-settlement leasing or resale. Our services cover everything from suburb research and property selection, to price negotiation, auction bidding, and post-settlement support.

Start with an obligation-free 30-minute discovery session on Zoom. BOOK NOW.

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