Insights

Three months have passed since the Federal Budget was handed down, and while the proposed changes to negative gearing, capital gains tax (CGT) and discretionary trusts are not yet law, they are already influencing financial decisions.

From a financial planning perspective, the biggest shift has not been legislative – it has been behavioural. Investors, business owners and advisers are increasingly evaluating strategies based on how they may operate under future rules, rather than relying on tax outcomes that have historically driven decision-making.

Negative Gearing Changes 2026: What Investors Are Doing Now

The proposed negative gearing changes have prompted many property investors to reassess future acquisition strategies.

We’re seeing increased interest in:

• Purchasing established properties before the grandfathering provisions take effect
• Reviewing the timing of future property sales
• Understanding how proposed CGT changes could affect long-term returns

More importantly, investors are placing greater emphasis on cashflow and investment quality.

Historically, tax benefits helped offset the cost of holding highly leveraged properties. If the proposed changes proceed, future investors may need to rely far more on rental income and less on annual tax refunds to support cashflow.

As a result, conversations are increasingly focused on:

• Rental yield and vacancy risk
• Serviceability without tax offsets
• Interest rate resilience
• The long-term fundamentals of a property rather than tax outcomes alone

This isn’t necessarily a negative development. In many respects, it encourages more disciplined investment decision-making and greater emphasis on the underlying strength of an asset.

Property Investment Strategy After the Federal Budget 2026

One of the more significant aspects of the proposed reforms is that new residential builds will continue to receive favourable negative gearing treatment.

While this creates a structural advantage for new properties, tax should only ever be one part of the decision.

Investors are also considering:

• Rising construction costs
• Developer and completion risk
• Potential oversupply in certain markets
• Location and long-term demand fundamentals

At the same time, the proposed CGT reforms may reduce the appeal of strategies that rely primarily on future capital growth.

The practical outcome is that both new and established properties are likely to be assessed more rigorously, with investors focusing on total returns rather than tax concessions.

Family Trust Tax Changes: What Business Owners Should Consider

Although the proposed 30% minimum tax on discretionary trusts would not commence until 2028, many families and business owners have already started reviewing their structures.

For years, discretionary trusts have provided flexibility around income distribution, asset protection and succession planning. While those benefits remain, the proposed reforms may reduce some of the tax advantages traditionally associated with income splitting.

As a result, many clients are beginning to explore:

• How future trust distributions may be taxed
• The ongoing role of bucket company arrangements
• Whether existing structures remain fit for purpose
• Opportunities that may arise through future restructuring relief provisions

Importantly, this doesn’t mean family trusts are no longer effective. Asset protection, succession planning and flexibility remain valuable considerations that often extend well beyond tax outcomes.

However, the proposed changes reinforce the importance of regularly reviewing structures as circumstances and legislation evolve.

Why Superannuation Is Becoming More Attractive

One trend that has become increasingly clear over the past three months is the growing relative attractiveness of superannuation.

As the taxation of property and trust structures becomes less certain, superannuation continues to offer:

• A well-established legislative framework
• Concessionally taxed investment earnings
• Long-term retirement planning benefits
• Effective intergenerational planning opportunities

For many clients, this has prompted broader discussions about the role superannuation should play within their overall wealth strategy.

Financial Planning After the Federal Budget 2026

Perhaps the most important observation since the Budget is that clients are increasingly focusing on broader strategy rather than individual tax outcomes.

Instead of asking:“How do I minimise tax?”

The conversation is more often:

• Does this investment still make sense without a tax concession?
• Is my current structure appropriate for the next decade?
• How do these changes affect my retirement objectives?
• Am I adequately diversified across property, investments and superannuation?

This is a positive shift. The strongest financial strategies have always been those built around cashflow, risk management, asset quality and long-term goals, with tax acting as a supporting consideration rather than the primary driver.

What We Are Advising Clients Right Now

At this stage, our guidance remains measured.

The proposals are not yet law and may change as consultation and parliamentary processes unfold. For most clients, there is no immediate need for major restructuring or rushed investment decisions.

Instead, we are encouraging clients to:

• Review existing strategies in light of potential changes
• Model different scenarios rather than relying on assumptions
• Understand how property, tax, superannuation and estate planning interact
• Use the lead time before any implementation dates to make informed decisions

Final Thoughts on the Federal Budget 2026 Changes

Three months on from the Federal Budget, the most significant impact has been a change in mindset rather than a change in legislation.

Property investors are paying closer attention to cashflow and fundamentals. Business owners and families are reviewing trust structures. Superannuation is becoming increasingly attractive as a long-term planning vehicle.

Whether the proposals ultimately proceed in their current form or are amended, the underlying lesson remains the same:

The most resilient financial strategies are those built on strong fundamentals, clear objectives and flexibility, not on tax concessions alone.

If you would like to review your strategy or better understand how these proposed changes may apply to your circumstances, speak with your adviser or reach out to Altitude Advisers for a complimentary initial meeting. We’d be happy to help you navigate the options and ensure your plans remain aligned with your long-term objectives.

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