How to choose the right ownership structure for new property now

From 1 July 2027, most Australian investors will lose the 50% CGT discount and face tighter negative gearing rules, so the “best” ownership structure for a new property is the one that still works when those new settings fully apply. In practice, that usually means stress‑testing personal, trust, company and SMSF options for tax, asset protection, borrowing capacity and exit flexibility before you sign a contract.

Here’s the decision‑grade version you can act on this week.

Different ownership structures trade off tax, asset protection and borrowing power.

1. The new rules that actually change structure decisions

From the 2026–27 Budget measures and the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026:

1. 50% CGT discount largely replaced by indexation – from 1 July 2027, resident individuals and trusts generally lose the 50% discount; instead, post‑2027 gains are indexed for inflation (CPI) and then taxed, with a minimum 30% tax on many individual gains.
2. Negative gearing restricted for residential property – losses on many established rentals bought after 12 May 2026 will be quarantined or denied against wage and other income, while some new builds and larger vehicles are carved out.
3. Pre‑ and post‑2027 gains are split – assets held before 1 July 2027 will have their gains divided between an old‑rules portion (still potentially eligible for the 50% discount) and a new‑rules, indexed portion.

The upshot: you can no longer assume that “buy personally + rely on the 50% discount + full negative gearing” is the default best option.

For gearing basics under the new settings, see Plain‑English Gearing Basics Every Australian Property Investor Must Know.

2. Quick comparison: personal vs trust vs company vs SMSF

At‑a‑glance trade‑offs for new investments

Illustrative only – specific tax outcomes depend on your income, property type and future rule tweaks.

For high‑value or complex deals, cross‑check with How to structure high‑end property purchases the smart way.

3. When personal ownership still makes sense

Best for: simplicity, borrowing power, modest portfolios

Who it usually suits:

• First or second‑time investors with 1–3 properties in mind.
• Borrowers who need maximum serviceability for PPOR + 1–2 investments.
• People without major asset protection concerns (e.g. not in a risky profession or running a business).

Pros:

• Strongest borrowing power. Lenders assess you in your own name, with widest product choice and up to 90–95% LVR (with LMI).
• Lowest admin. One tax return, no separate entity compliance.
• Grandfathering. If you buy before key negative gearing dates, existing concessions may be preserved for that asset.

Cons under the new rules:

• Future gains after 1 July 2027 are taxed using CPI indexation with a minimum 30% tax for many individuals – less attractive for long‑term hold strategies than the old 50% discount.
• Less ability to income‑split capital gains or rent if you’re a high earner.
• Poor asset protection if you’re sued personally or your business fails.

Worked example – personal vs trust (high income)

Assume:

• New established investment, $900,000 purchase, 80% LVR interest‑only at 6.5% p.a.
• Rent $800 per week, other costs $8,000 p.a.
• 10‑year hold, 3% p.a. capital growth (roughly in line with RBA’s 2–3% inflation target).

After 10 years, value ≈ $1,209,000. Nominal gain ≈ $309,000. With 2.5% CPI, the real gain (after indexation) might be around $80,000–$100,000.

• In your own name at 45% marginal rate: tax ≈ 30–45% of the indexed gain (say $24k–$45k, depending on minimum tax mechanics and future marginal settings).
• In a trust distributing to a 24% beneficiary: tax ≈ 24–30% on the indexed gain (say $19k–$30k), but any rental losses may have been trapped in the trust during the hold.

The gap is narrower than the old world where you’d often only pay tax on half the gain. That’s why structure now leans more on asset protection and flexibility than pure CGT arbitrage.