An open letter to Australia’s property buyers

You will have seen the headlines. Tuesday night’s Federal Budget delivered the most significant overhaul of investment property tax in a generation. Negative gearing has been reshaped, the 50 per cent capital gains tax discount has been replaced, and there will be a new minimum tax on family trusts.

If you own investment property, or you are thinking about buying, I understand the instinct to pause. To wait. To wonder if the rules of the game have just been rewritten against you.

I want to share something Cohen Handler has learned across nearly two decades of guiding clients through every kind of market: panic is rarely a strategy, and uncertainty is rarely a reason to step away from real estate. It is, more often, a reason to step closer to the people who understand it best.

The simple version
Some key points you should know:

• Existing portfolios are protected. Anyone already negatively gearing an investment property can keep doing so until they sell it.
• For everything purchased from 7.30pm on Tuesday onward, only two asset categories come through the new system unaffected: new builds, and the family home you live in.
• Existing residential property, along with every asset class including shares, ETFs, art and cryptocurrency, loses its tax advantages from July 2027.
• Discretionary trusts get a new minimum tax.

The tax system has been narrowed to two clear carve-outs: the home you live in, and newly built investment stock. That matters. But tax is not, and should never be, the whole story for investors.

Why this is not a moment to panic
I have been in property long enough to have seen every version of this conversation before. GST. First home owner grants coming and going. Foreign buyer bans. APRA caps on investor lending. Cash rates falling to 0.1 per cent and climbing back to 4.35 per cent.

Each of these moments was framed at the time as the end of property investing in Australia. None of them were.

The market kept moving because the fundamentals kept holding. Those fundamentals have not shifted overnight. Australia still has a structural housing shortage. Population growth still outstrips dwelling completions. Rental vacancies in most capital cities are at or near historic lows. The pipeline of new homes is still well short of what the country needs. And this is precisely why new builds have been carved out of these changes.

Treasury itself does not expect these changes to push property prices down. This is a tax reform aimed at fairness, not a market-correction policy. The market is being reshaped, not de-rated.

When demand exceeds supply, property prices have one direction to travel over the long term. A tax adjustment does not repeal that.

And, at Cohen Handler, and our specialist investment division CH Secure, for every portfolio we have ever helped clients build, tax treatment was only one part of the strategy. The backbone has always been the fundamentals of buying well. We look for the right asset, in the right location, at the right point in the cycle, held for the right horizon.

Those fundamentals did not change on Tuesday night. They never do. They are where the long-term outcome is actually decided, and they are exactly what we are built for, to help you get right.

The family home is getting an upgrade
After Tuesday night, the home you live in is arguably the most attractive asset class in the country. It is fully exempt from capital gains tax. There is no cap on its value. There is no limit on how many times you can move up. And while almost every other investment asset has just lost some part of its tax advantage, the family home has lost nothing.

You, and everyone else in Australia, should be seriously thinking about your principal place of residence, whether that means buying your first home, upgrading, or repositioning into a property with stronger long-term capital growth fundamentals. What used to be primarily a lifestyle decision has just become one of the most powerful wealth strategies available to ordinary Australians.

For nearly two decades, helping Australians buy the right family home has been Cohen Handler’s core business. If anything, it has just become more strategically important, and it is exactly the work we have spent the last two decades getting better at than anyone else in the country.

Two pathways for investment property
The conversation about investment property is being framed almost entirely around tax, and specifically around what is now exempt from the changes and what is not. That is a narrow lens, and it misses how serious investors actually build wealth.

Our acquisition analysis has never relied on negative gearing. The properties we source for clients are already high yield, with low holding costs. They pay for themselves on the fundamentals. Tuesday night’s Budget did not change that approach. If anything, it validated what we have done from day one.

There are now two legitimate pathways for investment property in Australia. Both are real. Both work. Both belong on the table.

The first is the yield-led path: well-located established stock bought for income. Properties that genuinely stack up on their own numbers do not need a tax shield to make sense. Strong rental yield, disciplined acquisition pricing and low holding costs produce returns the same way they always have. The removal of negative gearing on newly acquired established property from July 2027 only matters to investors who were leaning on tax losses to make a marginal deal work. For investors buying properties that pay for themselves, the changes are largely irrelevant.

The second is the growth-led path: new builds, with negative gearing and the 50 per cent CGT discount option retained. The Government is deliberately steering investor capital toward this segment, and there will be genuine opportunities here.

But the same flood of capital will create a flood of marketing. Project marketers and developers are about to spend enormous sums pulling investors directly into new stock. Not every new build is a good investment. The location matters. The floorplan matters. The body corporate matters. Above all, the developer matters. Closely examine their track record, the quality of what they have actually built, and what their existing buildings are worth today on the secondary market.

Both pathways need the same thing to work: independent expertise, on-the-ground intelligence, and discipline. We are built for both. We are not aligned with any developer, project, builder or agent. We take no commissions. We work for you, the buyer. Whether that means sourcing a high-yielding established property that pays for itself, or finding the small number of new-build opportunities genuinely worth your capital.

The market is not closing. It is reshaping. And reshaping markets are where the best buying decisions get made.

Whether you are looking to upgrade the family home, expand an investment portfolio, or simply understand where you stand under the new regime, please reach out to your Cohen Handler contact or get in touch with the CH Secure team directly. We would welcome the conversation.

Calm heads. Clear strategy. Long view.

That is how we have always approached property. And it is exactly how we will approach this.

Best regards,

Simon Cohen

Founder and Chief Executive Officer
Cohen Handler | CH Secure | Rentta | Cohen Farquharson