Tax Rules Tighten, Superfunds are still taking Centre Stage

 

News | Mehak Gaba | Released: 18/06/2026 | Read: 5 Mins

 

 

For many years, Australian investors have relied on three key tax concessions to help build wealth:

• Negative gearing on investment properties.
• The 50% Capital Gains Tax (CGT) discount on assets held for more than 12 months.
• Flexible income distribution through discretionary trusts.

 As a result, investors may need to REASSESS THE TYPE OF ENTITY how and where they hold their investments moving forward. In this newsletter, We will provide a brief overview of the proposed changes? What are key commencement dates and transitional rules? Why Superfunds are receiving increased attention ?

 

Negative Gearing Rules Tighten for Property Investors

 

 

Under the current rules, this loss can be offset against her other income, reducing her taxable income to $75,000 and lowering her tax payable. These rules are proposed to change from 1 July 2027.

 

 

Before applying negative gearing, check the following:

• When was the property acquired? - Dates are very important !
• Is it a commercial property, new residential build, or established residential property?
• Under what structure is the property held (individual, trust, SMSF, or partnership)?

 

 

Scenario 1 – Property owned (or under contract) before 7:30pm AEST on 12 May 2026.

✅ Negative gearing continues indefinitely under the existing rules (Grandfathered). Any rental losses can continue to be offset against salary and other taxable income, even after 1 July 2027. NOTHING CHANGES.

 

 

Scenario 2 – Property acquired between 12 May 2026 and 30 June 2027

 

 

Scenario 3 – Property purchased on or after 1 July 2027

❌ Negative gearing is generally not available.

 

But there are new exemptions:

 

• eligible new builds (to increase housing stock).
• properties held by widely held trusts and superannuation funds. (Exemption on SUPERFUNDS)
• targeted build-to-rent developments and private investors supporting government housing programs.
• Losses from established residential properties:
  • will only be deductible against rental income or the capital gains from residential properties
  • can be carried forward and offset against residential property income in future years.

Proposed 30% Minimum Tax on Discretionary Trust- 1st July 2028 

• Trust income: $200,000
• Split (individual beneficiaries):
  • Husband: $50k
  • Wife: $50k
  • 2 kids: $50k each

👉 Each person taxed separately → lower total tax.  Each person is taxed at their own marginal tax rate.

Proposed Changes

• • A 30% minimum tax will apply to the taxable income of discretionary trusts and will generally be paid by the trustee.

  • Beneficiaries, excluding corporate beneficiaries, will receive non-refundable credits for the tax payable by the trustee.

  •  

    A 30% floor — not a cap this means that if a beneficiary’s effective tax rate is above 30 percent, they will still need to pay additional tax, while those taxed below 30 percent will not receive a refund for the difference. 

     

  • Expanded rollover relief will be available for three years from 1 July 2027 to support small businesses and others that wish to restructure into another entity type.

  • The proposed rules do not apply to SUPERFUNDS (Exemptions on Superfunds) and other complying superannuation funds, Fixed and widely held trusts, Charitable trusts, Special disability trusts, Deceased estate.

Abolition of the CGT Discount

Join My Webinar- 25th June 2026!

 

• CGT Concessions Remain: SMSFs are expected to retain their existing one-third CGT discount on assets held for more than 12 months, while individuals and trusts may lose access to the current 50% discount.
• Exempt from Negative Gearing Changes: Proposed negative gearing restrictions are not expected to apply to SMSFs, allowing them to continue operating under the current rules.
• Excluded from the Proposed 30% Trust Tax: The proposed minimum 30% tax rate for discretionary trusts from 1 July 2028 will not apply to complying superannuation funds.
• Concessional Tax Environment: Investment earnings in an SMSF are generally taxed at a maximum rate of 15% in accumulation phase, with potential tax-free earnings in retirement phase.

 

As tax rules tighten for individuals and discretionary trusts, SMSFs continue to offer a highly tax-effective environment for long-term wealth creation.

Visit www.trustdeed.com.au for more details or call us on(02) 9684 4199

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