Are Investors Repositioning Ahead of Tax Reform?

Investor conversations are shifting from acquisition to positioning

Since the Federal Budget in May, investor conversations have increasingly shifted from acquisition strategies to portfolio positioning. While it is still too early to draw definitive conclusions, anecdotal evidence across the property and wealth management sectors suggests some investors are considering asset sales before the proposed capital gains tax (CGT) reforms take effect in July 2027.

What the Budget proposed for CGT and negative gearing

The Budget proposed replacing the longstanding 50% CGT discount with a cost-base indexation model, alongside the introduction of a minimum tax rate on capital gains. At the same time, negative gearing concessions for newly constructed homes remain. While the legislation is now progressing, investors have more than 12 months to assess how these changes may affect their long-term wealth creation strategies.

Investors are exploring diversification, not exiting property

Historically, periods of policy uncertainty have encouraged investors to reassess portfolio construction. Rather than exiting property entirely, many are exploring investment structures that offer professional management, income generation and diversification without the concentration risks associated with owning a single residential asset. Commercial property, property funds and institutional-grade real estate opportunities are increasingly featuring in these discussions.

Property fundamentals remain intact

Importantly, quality real estate fundamentals remain intact. Population growth, housing undersupply and infrastructure investment continue to support long-term demand across many Australian markets. As a result, the investment question for many is not whether to maintain property exposure, but how best to access it in a changing tax and economic environment.

An opportunity for property funds

For property funds, this could present an opportunity. Investors seeking diversification, passive income and access to professionally selected assets may increasingly view unlisted property funds as an alternative way to participate in property markets while navigating evolving taxation settings.

Explore Oliver Hume Property Funds.

As always, investment decisions should be driven by long-term objectives rather than short-term policy changes, but the post-Budget environment is clearly prompting many investors to review their next move.

The full analysis of investor sentiment and portfolio trends is in the complete June Quarter QMI. Register to receive the June Quarter QMI and all future editions.