Market in Minutes: Australia Capital Markets

2026-27 Federal Budget

Implications for commercial property

The 2026–27 Federal Budget proposes significant changes to Australia’s taxation system, primarily through reforms to Capital Gains Tax (CGT), restrictions on negative gearing, and new trust taxation measures.

Collectively, these changes increase the effective tax burden on capital and will alter the investor mix and investment strategies. 

Highlights:

• Removal of the 50% CGT discount and introduction of a 30% minimum tax increases the effective tax burden on capital

• Greater emphasis on income and inflation-adjusted (real) returns over capital growth

• Upward pressure on required returns and yields, with more moderate capital value growth expected

• Potential uplift in transaction volumes ahead of July 2027 as investors bring forward disposals

• Reduced attractiveness of discretionary trusts and domestic private capital

• Increasing role of institutional and offshore investors in the market

• Commercial property relatively advantaged, supported by ongoing negative gearing and income-led returns

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