The Federal Budget has landed...
WHAT COMMERCIAL PROPERTY INVESTORS NEED TO KNOW
The proposed 2026 Federal Budget changes are expected to significantly impact property investors, including those holding commercial assets.
• From 1 July 2027, the current 50% Capital Gains Tax (CGT) discount would be replaced with a new system involving cost base indexation and a minimum 30% tax on net capital gains
• These changes are proposed to apply to all CGT assets, including commercial property held by individuals, trusts and partnerships.
• While the negative gearing reforms are aimed at residential property, commercial property would still allow deduction of losses against other income, potentially making it comparatively more attractive for some investors
• From 1 July 2028, a proposed 30% minimum tax on discretionary trusts may also impact many commercial property holding structures
• Some investors may consider shifting focus toward commercial property due to stronger yields and continued deductibility benefits.
• Existing owners considering a sale may look to transact before July 2027 to retain the current CGT treatment.
• The changes could encourage longer-term holding strategies and reduce overall transaction activity across the commercial market.
Locally the Southern Gold Coast and Northern NSW commercial markets continue to see strong interest from both owner occupiers and investors, driven by ongoing population growth, infrastructure investment and lifestyle migration into the region We are also seeing increased enquiry from residential investors exploring alternative asset classes, particularly those reassessing strategy around the proposed residential tax changes.
While newly built residential property is still expected to remain attractive for some investors, commercial assets are increasingly being considered for their stronger yields, longer lease structures and diversified opportunities Through our close collaboration with the residential division, we have access to one of the largest active buyer pools across the Southern Gold Coast, allowing us to present commercial opportunities to a broader audience of previously untapped investors already active within the local property market
Importantly, these measures are currently proposed only and would still need to pass through Parliament before becoming law Investors should seek independent financial and taxation advice specific to their circumstances If you’d like to understand what any of this could mean for your portfolio, feel free to reach out.