Key takeaways
The proposed tax changes could reshape property investment and wealth transfer strategies, particularly around capital gains tax and family trusts.
Property investors remain essential to Australia’s housing market, supplying much of the rental accommodation despite rising taxes and government charges.
The proposed CGT changes may increase complexity and tax liabilities, making strategic planning more important for investors.
Family trusts are still valuable wealth structures, but new tax measures could reduce some of their traditional advantages for intergenerational planning.
Long-term success in property investment still comes from owning quality assets in strong locations, not simply chasing tax benefits or reacting to media fear.
There’s a lot of noise around property at the moment.
Whenever governments start talking about tax changes, trusts, capital gains, inheritance, or “fairness,” investors understandably sit up and take notice. And so they should.
The proposed Budget changes now being discussed could have important implications for property investors, business owners, families, and anyone trying to build and pass on wealth in a sensible way.
in the latest episode of The Market Room, I sat down with Michael Yardney and Ken Raiss to unpack what these proposed changes could mean, particularly for the way investors buy property, structure their assets, and plan for the future.
Between them, Michael and Ken bring more than 100 years of experience in property, tax structures, investment strategy, and wealth creation.
The big message from our discussion was simple.
Don’t panic, but don’t ignore what’s happening either.
A changing landscape for property investors
The recent Budget announcements have created plenty of debate, and much of it centres around whether governments are making it harder for everyday Australians to build wealth.
Ken Raiss described the proposals as an attack on property owners, business owners, entrepreneurs, and those who have worked hard to get ahead.
His concern is that some of the measures being discussed could start to look like a form of inheritance tax, particularly where they affect family homes, trusts, and the transfer of wealth between generations.
Michael Yardney made a similar point. He suggested that while the government may present these changes as a way to address intergenerational inequality, investors should look carefully at whether the measures will really help first-home buyers or simply raise more tax revenue.
As Michael reminded us, governments often find it politically easier to take from one group and give to another, especially when the receiving group is larger or more vocal. That does not necessarily create better housing outcomes.
He mentioned a quote from George Bernard Shaw:
“In a government that promises to rob Peter to pay Paul, it can always depend on the support of Paul.”
In other words, governments can often rely on the support of those who benefit from such policies, even if the broader implications are detrimental.
Property investors are part of the solution
One of the biggest problems with the current debate is that property investors are often treated as part of the problem.
In reality, they are a very important part of the housing system.
Private investors provide a large share of the rental accommodation Australians rely on. Without them, the rental crisis would be even worse.
And let’s not forget that property already carries a very heavy tax burden.
Government charges, taxes, levies, stamp duty, land tax, GST, council rates, and infrastructure contributions all add significantly to the cost of housing.
Fact is, more than 50% of the cost of building a new home can be attributed to government charges and taxes.
So when governments talk about making housing more affordable, they need to recognise the role their own taxes and charges play in pushing prices higher.
Capital Gains Tax?
One of the key concerns discussed was the potential change to Capital Gains Tax.
At present, many investors who hold an asset for more than 12 months are eligible for the 50% CGT discount.
The proposed shift from that simple discount system to an indexed system could make things more complex for property owners and investors. It may also create a need for additional valuations, with some changes potentially taking effect by 30 June 2027.
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That matters because complexity usually leads to higher compliance costs, more uncertainty, and the need for better advice.
It could also increase the tax payable for some investors when they eventually sell.
Of course, tax should never be the main reason someone buys a property, but it is part of the equation, and investors need to understand how changes to CGT may affect their long-term strategy.
Are family trusts still useful?
in our discussion, Ken Raiss discussed family trusts.
For many years, trusts have been used by families to help manage wealth, protect assets, distribute income, and pass assets to the next generation in a more controlled way.
Ken’s view was that family trusts are far from dead.
However, the proposed tax measures could reduce some of the advantages investors and business owners have traditionally relied upon, particularly when it comes to trust distributions and what happens when someone passes away.
That does not mean investors should rush to unwind existing structures. In fact, that could be a very costly mistake.
But it does mean families should review their structures and make sure they still suit their long-term goals.
The right structure for one investor may be completely wrong for another.
That is why getting personalised advice is becoming even more important.
Don’t let tax changes drive your investment decisions
While tax changes can affect the way investors structure their affairs, they should not change the fundamentals of successful property investment.
Michael made the point that long-term wealth is created by owning high-quality assets in strong locations. That has not changed.
Investors still need to focus on properties that appeal to owner-occupiers, are located in areas with strong incomes, limited supply, good amenities, and long-term demand.
Tip: A great property in the wrong structure may create problems. But a poor property in the right structure is still a poor investment.
That is why the starting point should always be strategy.
Stay calm and think long term
Whenever proposed tax changes hit the headlines, there is a temptation to react quickly.
Some investors start thinking they should sell. Others freeze and decide to do nothing.
Both reactions can be costly.
The better approach is to stay informed, seek proper advice, and avoid making emotional decisions based on political noise or media fear.
Property investment has survived plenty of tax changes, interest rate cycles, credit squeezes, recessions, booms, downturns, and government intervention.
The investors who succeed are usually those who keep a long-term perspective and adapt when required.
That does not mean ignoring the changes.
It means understanding them in the context of your overall wealth plan.
