Federal Budget Property Decision Model

Use this tool to test whether the latest Federal Budget changes make it more attractive to buy, hold, sell, refinance or restructure an asset. It is designed as a conversation starter before receiving tax, legal or credit advice.

Property investors First home buyers Business owners Asset holders

Your situation

Change the assumptions below to compare the after-tax and cash-flow impact of the Budget changes.

Client profile
Relevant to negative gearing grandfathering.
Asset values
Cash flow
Planning assumptions
Client attitude

Scenario comparison

This table translates the model into the main choices clients may face over the next 18 months.

Scenario When it may suit Key risk Model signal

Recommended next step

Use this model as a first-pass filter. Before making a decision, clients should review tax, lending, legal, cash-flow and estate planning consequences.

Important disclaimer

This calculator and accompanying material are provided by QuickSelect for general information and education only. They are designed to help identify issues that may be worth discussing with an appropriately qualified professional. They are not personal advice and must not be treated as a recommendation to buy, sell, hold, borrow, refinance, restructure, invest, develop, dispose of an asset, change ownership, change tax structures or enter into any financial arrangement.

  • The model uses simplified assumptions and indicative calculations only. It does not calculate actual tax payable, borrowing capacity, credit approval, stamp duty, land tax, depreciation, vacancy, maintenance, insurance, body corporate, legal costs, selling costs, opportunity cost, superannuation outcomes, estate planning consequences or state-specific duties and concessions.
  • Tax law, Budget measures, regulations, lender policies and market conditions may change. Some Budget announcements may require legislation and may be amended before becoming law.
  • Capital gains tax, negative gearing, trust taxation, business concessions and deductibility outcomes depend on individual circumstances. Clients should obtain advice from a registered tax agent or accountant before relying on any tax-related assumption.
  • Any lending or borrowing outcome depends on lender assessment, serviceability, security, valuation, credit history, income verification, loan purpose and responsible lending obligations. Nothing in this tool is an approval, pre-approval or indication that credit will be available.
  • Past performance, modelled growth rates and assumed rental yields are not reliable indicators of future performance. Property, shares, business assets and other investments may rise or fall in value and income may vary.
  • QuickSelect, its related entities, directors, employees, contractors and representatives do not accept liability for loss arising from reliance on this tool, except where liability cannot lawfully be excluded.
  • Before acting, clients should seek independent tax, legal, financial planning and credit advice tailored to their personal circumstances.

Analysis and sources

The Federal Budget changes are best understood as a shift in tax support away from leveraged ownership of established assets and toward workers, new housing supply, selected business investment and fiscal repair. For QuickSelect clients, the most important practical question is not simply whether an asset is good or bad, but whether it still works after tax, interest, cash-flow pressure and replacement costs.

Core position: Existing quality assets, especially grandfathered established residential investment properties, should not be sold simply because the tax settings have changed. The right response is to model the after-tax outcome of holding, selling, refinancing, restructuring or redirecting capital.

Major positives

  • First home buyers: Reduced tax support for future investors in established property should reduce some investor competition in parts of the established market.
  • New housing: New builds retain more favourable treatment, which should redirect some investor demand toward additional supply.
  • Existing investors: Grandfathering may make existing holdings strategically valuable because future buyers may not be able to replicate the same tax position.
  • Small business: Measures such as the permanent instant asset write-off, loss carry-back and start-up support may assist cash flow and asset finance decisions.
  • Productivity and R&D: Red tape reduction, project approval measures and R&D support are directionally positive, although unlikely to solve capacity constraints on their own.

Major negatives

  • New investors in established residential property: The loss of wage-offset negative gearing materially increases the upfront after-tax cost of holding negatively geared established property.
  • CGT-sensitive asset holders: Replacing the fixed 50% CGT discount with indexation and a minimum tax can increase tax on assets that grow well above inflation.
  • Trust users: Proposed minimum tax settings for discretionary trusts may reduce the flexibility of some family, business and investment structures.
  • Construction and supply: New-build incentives help, but labour, materials, approvals, infrastructure and finance constraints may limit how quickly supply responds.
  • Inflation and rates: Some commentators argue the Budget is not clearly contractionary and may do little to change the RBA's near-term thinking.

What the CommBank articles add

CommBank's housing update gives a useful client-facing interpretation: for an affected new investor buying established property, the negative gearing change can feel like an immediate investor mortgage-rate increase of roughly 90 to 155 basis points, depending on the property and assumptions. CommBank also estimates the combined housing policy effect could leave dwelling prices around 3% lower than otherwise over time, with the impact concentrated in investor-heavy market segments.

CommBank's business update describes the Budget as broadly neutral for businesses overall, with useful support for small businesses, R&D, venture capital and productivity, but with limited near-term impact on inflation or borrowing costs.

Points of debate

  • Rent impact: Treasury and CommBank expect the rent impact to be modest, but a contrarian view is that investor retreat could tighten rental supply over time if new construction does not respond quickly.
  • Price impact: Some investors may sell before the CGT changes, but grandfathering may also reduce turnover because existing investors have a reason to hold.
  • New-build incentives: Redirecting incentives toward new housing may support supply, but incentives can also be capitalised into higher new-build prices if supply constraints remain.
  • Fiscal stance: The Government frames the Budget as responsible and disinflationary, while several commentators argue broader spending may be neutral to mildly expansionary.
  • Entrepreneurship: R&D and venture capital measures are positive, but higher CGT on successful exits may reduce the incentive to take long-term business risk.

Source references

Hypothetical expert panel

This section is a fictional discussion using simplified interpretations of well-known economic philosophies. It is included to help clients think about the Budget from different perspectives. It is not a claim about what any historical figure would actually say.

Karl Marx

Opening view: The Budget recognises, even if reluctantly, that the tax system has favoured asset owners over workers. Reducing concessions that help those who already own capital is a step toward correcting unequal ownership of housing and wealth.

Challenge to others: The market did not naturally produce affordable housing. It produced speculation, landlord advantage and intergenerational inequality. If the state does not intervene, capital accumulates where it is already strongest.

One change he would make: Go further by taxing unearned land and capital gains more heavily and using the proceeds to build public, social and affordable housing at scale.

7/10

Milton Friedman

Opening view: The Budget is too interventionist. It replaces one distortion with another by favouring new builds, altering CGT rules and complicating investment decisions. The better solution is a simpler, lower and broader tax system.

Challenge to others: Housing affordability is not solved by punishing investors. It is solved by increasing supply, reducing planning constraints and allowing prices to signal where resources should go.

One change he would make: Replace targeted concessions and penalties with broad tax simplification and aggressive planning deregulation to allow housing supply to respond faster.

4/10

John Maynard Keynes

Opening view: The Budget tries to balance fairness, demand management and investment. It is sensible to support workers and small businesses while nudging capital toward productive activity, but the timing matters if inflation and rates remain elevated.

Challenge to others: Markets can remain unbalanced for long periods. If housing supply is constrained and households are under pressure, public policy has a role in supporting demand where useful and restraining speculation where harmful.

One change he would make: Pair the tax reforms with a larger, faster public infrastructure and housing delivery program so demand shifts are matched by actual supply.

6.5/10

Friedrich Hayek

Opening view: The Budget relies too heavily on central design. By changing tax treatment across asset classes, the Government risks creating unintended consequences, especially if investors, builders and lenders respond differently from Treasury's models.

Challenge to others: No central planner has enough information to fine-tune housing, investment, rents, construction and tax outcomes. Complexity itself becomes a cost.

One change he would make: Remove planning and approval barriers, reduce regulatory uncertainty and let decentralised investment decisions guide supply.

4.5/10

Panel conclusion

The panel would disagree on ideology, but they would likely agree on one practical point: housing affordability cannot be solved by tax changes alone. The Budget changes incentives, but the long-term outcome depends on whether Australia can deliver more housing, reduce construction bottlenecks and give households confidence to make long-term decisions.