If you’ve been following the Federal Budget announcements, you’ve probably seen plenty of discussion around negative gearing, Capital Gains Tax (CGT) and discretionary trusts.
For property investors, it’s understandable if the proposed changes have raised a few questions. Not necessarily about property itself, but about how investments are owned, structured and managed over the long term.
While much of the media attention has focused on housing affordability and what the changes could mean for the property market, many investors are now taking a step back and asking a different question:
“Is my current investment structure still the right one moving forward?”
One area that’s started to generate more discussion as a result is Self-Managed Super Funds (SMSFs).
That’s not because SMSFs are new. They’ve been around for a long time. But while several traditional investment structures are facing proposed changes, superannuation and SMSFs remained largely untouched in the Federal Budget.
As a result, many investors and business owners are beginning to explore whether SMSFs deserve a closer look as part of their long-term planning.
What Changed in the Federal Budget?
Before we talk about SMSFs, it’s worth quickly recapping some of the key changes in the Federal Budget that have investors paying attention.
Changes to Negative Gearing
The Government announced plans to remove negative gearing concessions for established residential investment properties purchased after 12 May 2026.
Under the proposed reforms:
- Newly built properties will remain eligible for negative gearing.
- Existing investment properties will be grandfathered under the current rules.
- Deductions for investment losses on established residential properties would no longer be claimable against personal income for newly acquired properties after the commencement date.
The changes are proposed to commence from 1 July 2027 and are intended to encourage greater investment into new housing supply.
For many investors, negative gearing has been an important part of their overall strategy for decades. It’s easy to see why these proposed changes have generated so much discussion.
Changes to Capital Gains Tax (CGT)
The Government has also proposed replacing the current 50% Capital Gains Tax discount from 1 July 2027 with a cost-base indexation model.
Under the proposed system:
- The current 50% CGT discount would be removed.
- Capital gains would instead be adjusted for inflation using indexation.
- A proposed minimum 30% tax rate on capital gains would apply.
Existing investments are expected to retain current treatment under grandfathering provisions.
If introduced, the reforms could change how some investors think about long-term capital growth and future after-tax returns.
As always, investors concerned about how these changes may affect their personal circumstances should consider discussing the implications with their accountant, tax adviser or financial professional.
Changes to Discretionary Trust Taxation
The Federal Budget also proposed changes to discretionary trust taxation, including the introduction of a proposed minimum 30% tax rate on discretionary trust distributions from 1 July 2028.
For many Australians, discretionary trusts have long been used as part of broader wealth creation, succession planning and investment strategies.
The proposed changes may impact:
- Income distribution strategies
- Tax planning
- Succession planning
- Long-term investment structures
Individually, each of these proposed reforms may be manageable. Collectively, however, they represent one of the biggest shifts to the investment landscape in years.
Why Investors Are Taking a Fresh Look at Their Strategy
For many investors, the proposed changes aren’t necessarily causing panic. But they are creating a reason to pause and reassess.
That’s especially true for investors who have historically relied on negative gearing, discretionary trusts or long-term capital growth as key parts of their overall strategy.
The reality is that property investing has always evolved alongside changes to lending rules, taxation and market conditions. This may simply be another example of that.
What we’re seeing now is a broader conversation around:
- How investments are owned
- Long-term tax outcomes
- Retirement planning
- Wealth preservation
- Portfolio diversification
Property is still property. The bigger question many investors are now asking is whether the structure they’ve used for years is still the right one moving forward.
Why SMSFs Are Getting More Attention
This is where SMSFs are increasingly entering the conversation.
While several traditional investment structures are facing proposed reform and increased scrutiny, SMSFs remained largely untouched in the Federal Budget.
That’s not to say SMSFs are suddenly the answer for every investor. Far from it.
But it’s understandable why more people are looking into how they work and where they might fit into a long-term strategy.
SMSFs continue to offer a range of features that many investors find appealing, particularly when thinking about retirement planning and long-term wealth creation.
These include:
- A concessional tax environment
- Long-term retirement planning opportunities
- Potential CGT concessions within super
- Greater control over investment decisions
- Access to residential and commercial property investment opportunities
For some investors, the conversation is no longer just about what asset to invest in. It’s increasingly about how those assets are owned and structured over the long term.
Of course, whether an SMSF is appropriate will depend entirely on an individual’s circumstances, objectives and broader financial position. Before considering any structural changes, we strongly reccomend seeking professional advice from your accountant or a tax professional.
Why Business Owners Are Also Paying Attention
Interestingly, it’s not just property investors talking about SMSFs.
Many business owners are also taking a closer look.
One strategy that’s often discussed involves purchasing commercial property through an SMSF and leasing the property back to the operating business, subject to relevant superannuation and compliance requirements.
For some business owners, this may form part of a broader conversation around:
- Building wealth outside the business
- Long-term retirement planning
- Succession planning
- Commercial property ownership
Again, this doesn’t mean it’s the right fit for everyone.
However, with proposed changes now affecting several traditional investment structures, it’s understandable why more business owners are exploring alternative ways to hold and manage assets over the long term.
Important Things to Understand About SMSF Property Investing
If there’s one thing worth highlighting, it’s that SMSF property investing is highly specialised.
It’s often talked about in simple terms, but the reality is that SMSFs come with strict compliance, legal and lending requirements.
Before exploring SMSF lending, it’s important to understand that:
- SMSFs are heavily regulated.
- Borrowing structures are more complex than standard property lending.
- Liquidity and cash flow requirements are critical.
- Property investments must comply with superannuation legislation.
- Ongoing administration and compliance obligations apply.
This is one of the reasons why SMSF strategies are generally best approached as part of a broader long-term retirement and wealth planning discussion, rather than purely a tax-driven decision.
As always, it’s important to consult appropriately qualified professionals, including accountants, financial advisers and legal advisers where required.
The 2026 Federal Budget has sparked significant discussion around the future of property investment, taxation and long-term wealth planning in Australia.
With proposed changes to negative gearing, CGT and discretionary trust taxation now on the table, it’s understandable why many investors are taking a fresh look at how they structure their investments moving forward.
At the same time, SMSFs have become an increasingly common part of that conversation.
That doesn’t mean they’re the right solution for everyone. But it does mean more investors and business owners are taking the time to better understand how SMSFs work, how they compare to other structures and whether they may have a role to play in their long-term plans.
In a changing investment landscape, asking those questions is probably a good place to start.
