Negative gearing, CGT and trust changes. What investors need to know.

Episode 101 of Finance This, Property That is a panel conversation. Dion Fernandes is joined by an accountant, a financial planner and a buyer's agent to work through the proposed changes to negative gearing, capital gains tax and trust distributions, and what those proposals could mean for property structures, borrowing capacity and retirement planning.

This is the first conversation recorded under the newly launched Stratega Finance brand, and the panel split it deliberately into two parts. Part one, covered here, is about understanding the proposals clearly. Part two moves to how investors might adapt once the detail is known.

The tone throughout is measured. Proposals are not law. The panel's opening point is the one worth repeating: do not restructure assets or rewrite a strategy around a headline that has not passed parliament.

Why not act on the headlines?

The conversation opens with a caution that runs through the whole episode. Proposed changes to negative gearing, capital gains tax and trusts have been widely reported, but reporting is not legislation. Detail changes, timelines slip and final rules often look different from the early commentary.

The practical stance the panel lands on is simple. Understand the concepts. Watch the detail as it firms up. Make decisions with your own accountant and adviser when there is something real to decide, not before.

What are the proposed trust distribution changes?

Morgan, the accountant on the panel, walks through a proposed minimum tax on some trust distributions, reported at around 30 per cent. The key point he makes is that the impact could reach well beyond property investors.

Family trusts, operating companies and bucket companies are everyday structures for Australian small businesses. A change aimed at one group can touch many others. The panel also discusses how income moving between trusts and companies could, under some proposals, end up taxed more than once. None of this is settled, and every structure is different, which is exactly why the panel keeps returning to the same advice: get guidance specific to your own position.

How could capital gains tax changes affect retirement plans?

The discussion turns to business owners and everyday investors who plan to sell an asset later in life and contribute the proceeds toward superannuation. Proposed capital gains tax changes could alter the maths on that plan.

This is squarely financial planning and tax territory, and the panel treats it that way. The takeaway is not a recommendation. It is that retirement, tax and finance decisions are connected, and a change in one area can quietly move the others, so they are better reviewed together than in isolation.

Has the property market actually changed?

Chris, the buyer's agent, pushes back on the idea that it is business as usual. Higher interest costs, softer investor demand and shifting sentiment have changed the landscape. That does not mean opportunity has disappeared.

The panel discusses where prepared buyers may still find value: existing properties with long leases in place, motivated vendors and situations where reduced competition works in a buyer's favour. Preparation, not prediction, is the theme.

What could this mean for borrowing capacity?

Dion brings the conversation back to finance, and to a point investors often miss. Lender policy does not wait for legislation. Some lenders have already adjusted how they treat negative gearing benefits and rental income inside their servicing calculations.

Where those benefits are removed from a calculation, borrowing capacity can fall for certain investors. Dion's message is the responsible-lending one that runs through the whole show: the lender offering the highest number is not automatically the right choice. Being approved for an amount is not the same as it being sustainable for your plan.

• 00:00A new era. Welcome to the first conversation under the Stratega Finance brand, and why it is split into two parts.
• 02:00Do not decide on headlines. Why the panel cautions against restructuring before anything is passed into law.
• 05:00Proposed trust distribution changes. A reported minimum tax on some distributions, and why it could reach beyond property.
• 09:00How business owners could be affected. Family trusts, operating companies and bucket companies in the frame.
• 13:00The double taxation risk. How income moving between entities could be taxed more than once under some proposals.
• 16:00Capital gains tax and retirement. The effect on owners planning to sell and contribute to superannuation.
• 20:00Has the market shifted? Higher rates, softer demand and changing sentiment, examined.
• 24:00Where value may still sit. Long leases, motivated vendors and reduced competition.
• 28:00Lender policy is already moving. How some lenders assess negative gearing and rent before any law changes.
• 31:00The borrowing capacity effect. Why removing certain benefits from servicing can reduce what some investors can borrow.
• 34:00Approved is not affordable. Responsible lending, sustainable growth and why the biggest number can hurt a long-term plan.
• 36:00Why the right team matters. Finance, tax, planning and property strategy working from the same plan.
• 39:00What happens next. A preview of part two, where the panel moves from diagnosis to how investors might adapt.

Why does the right team matter now?

The strongest thread in the episode is not a tax opinion. It is structural. When finance, tax, financial planning and property strategy operate in separate rooms, an investor can end up with four sensible answers that contradict each other.

The panel's view is that a good result depends on those advisers communicating and understanding the complete plan. That is the whole reason a conversation like this puts an accountant, a planner, a buyer's agent and a finance strategist around the same table.

Key questions this episode answers

What is episode 101 of Finance This, Property That about?

Episode 101 is a panel conversation. Dion Fernandes is joined by an accountant, a financial planner and a buyer's agent to unpack the proposed changes to negative gearing, capital gains tax and trust distributions, and to discuss what those changes could mean for property structures, borrowing capacity, retirement planning and future investment decisions. It is general information only, not personal financial, tax or credit advice.

What proposed changes to negative gearing and CGT does the episode discuss?

The panel discusses proposals that could change how negative gearing benefits are treated and how capital gains tax applies when assets are sold. These are proposals, not legislation. The panel's consistent message is that nothing has passed, the detail matters and investors should understand the concepts in general terms rather than reacting to headlines. How any change would affect a particular person depends on their own circumstances and should be confirmed with their accountant.

Could changes to trust distributions affect small business owners?

The accountant on the panel explains that a proposed minimum tax on some trust distributions could reach well beyond property investors, because family trusts, operating companies and bucket companies are common structures for Australian small businesses. The panel also discusses the risk of the same income being taxed more than once as it moves between entities. This is a general discussion of a proposal and every structure is different, so business owners should seek advice specific to their situation.

How could negative gearing changes affect borrowing capacity?

Dion explains that some lenders have already changed how they treat negative gearing benefits and rental income in their servicing calculations, even though the proposed legislation has not passed. Where those benefits are removed from a calculation, borrowing capacity can fall for certain investors. The practical takeaway is that lender policy, not just the headline, shapes what you can borrow, and structure matters more than ever.

Should property investors restructure now in response to the proposed changes?

The panel's clear caution is not to restructure assets or change strategies based on proposals that have not become law. Decisions about trusts, ownership and tax should be made with your accountant and financial adviser, based on your circumstances and the final detail of any legislation. Finance, tax, planning and property strategy work best when they are considered together rather than in isolation.

The takeaway

Part one of this conversation is about staying calm and staying informed. The proposals to negative gearing, capital gains tax and trust distributions are worth understanding, but none of them is a reason to make a rushed structural decision today. Watch the detail. Keep your team aligned. Part two is where the panel turns from the problems to how prepared investors might respond.

This episode discusses proposed tax measures that were not law at the time of recording. The information is general in nature, does not take your individual circumstances into account and is not tax, financial or credit advice. Speak with your accountant and financial adviser about your own position before acting.