Federal budget impacts on Australian property investment strategies

In Short:
– Recent federal budget changes affect Australian property investments, removing negative gearing for established homes but keeping benefits for new builds.
– SMSF borrowing restrictions apply to residential real estate, allowing continued investment in commercial properties with potential tax benefits.

As Australia’s property investment landscape evolves, success is increasingly about strategy rather than simply choosing the right property.

Joining Broker Business host Rex Afrasiabi, property investment specialist Lucas Giannotti shared how investors can navigate the latest tax and lending reforms while identifying opportunities for long-term growth.

Among the biggest reforms are changes to negative gearing for established residential properties and new restrictions on borrowing through Self Managed Super Funds (SMSFs) for residential real estate.

Commercial and industrial properties, however, remain exempt from the SMSF lending changes, making them an increasingly attractive option for investors.

Giannotti said the Government is clearly encouraging investment in newly built homes.

Investors purchasing new residential properties can continue to access negative gearing benefits while also claiming depreciation on fixtures and fittings, improving the long-term financial outcome even if the purchase price is slightly higher than an established property.

He also noted that commercial property continues to present strong opportunities, particularly for SMSF investors seeking diversification and potentially higher returns.

Despite the policy changes, Giannotti said the fundamentals of successful property investing remain unchanged.

Strong demand, quality locations and careful research continue to underpin long-term performance.

He stressed the importance of thorough due diligence when buying new property, advising investors to assess a builder or developer’s track record, financial strength and after sales support.

Using a trusted development agency or “master agent” model can also help reduce risk by carefully vetting projects before they are offered to investors.