The recent federal budget's changes to negative gearing, capital gains tax (CGT) concessions and trust taxation signal a material shift for property investors that will flow through to the broader housing market.
The restricting of negative gearing eligibility to new builds, and a reduced CGT discount aim to slow speculative demand and boost revenue, while higher tax rates or altered thresholds for certain trusts will raise holding costs for investors who use family, unit or discretionary trusts. For prospective buyers of recently-constructed or new homes, this can mean greater competition from investor buyers over time, and may also prompt a short-term adjustment in sales activity as investors reassess portfolios.
Combined, higher investor tax costs and rising borrowing costs can reduce investor appetite and change pricing dynamics, which may influence borrowing conditions for owner-occupiers too.
As your mortgage broker, TAG Finance's priority is turning these changes into an actionable plan for you. If you're an investor, we should review cash flow under the new tax settings and consider interest-only vs principal-and-interest, switching loan structures, or refinancing to a lower rate. If you're buying or holding as an owner-occupier, now is a good time to check buffers, compare fixed vs variable options, and stress-test repayments against further rate moves.
TAG Finance is here to run tailored repayment scenarios and strategy options for you.