Brokers warned to be prepared for onslaught of investor queries

Additionally, negative gearing will be restricted to new builds for any established properties acquired after 7:30pm last night, meaning rental losses on those homes can only be offset against property-related income rather than a taxpayer’s salary or wages.

Mortgage & Finance Association of Australia (MFAA) CEO Anja Pannek highlighted that the immediate priority for the industry is managing the flow of information to concerned households and investors. She said that “the test for these reforms is whether they improve access to housing in practice without reducing the flow of investment into new supply”.

However, she added that “any changes to negative gearing and capital gains tax need to be carefully calibrated to avoid unintended consequences for housing supply, rental availability and investor confidence”.

“Brokers will be having practical conversations with clients who are trying to understand what these changes mean for their own circumstances. Clear guidance, careful implementation and appropriate transitional arrangements will be critical,” she said, adding that the association would be developing resources to assist brokers with client conversations following the budget.

“The priority must be clear, practical information so households, investors and small businesses can understand what these changes mean for their own circumstances.”

Major aggregators have said the expected onslaught of investor and first home buyer queries represents an opportunity for brokers to prove their value.

Finsure CEO Simon Bednar said: “The role of a broker has never been more important. There are clear opportunities in first home buyer activity, new-build lending, regional housing, small business finance and serviceability support. But major tax changes could also alter investor appetite, client behaviour and the way brokers discuss long-term property decisions.

“Investor clients will need more strategic conversations. The shift in negative gearing and CGT treatment means brokers should not give tax advice, but they should be encouraging clients to seek advice early and consider how future settings may affect borrowing, refinancing, buying, selling or holding decisions.”

Bednar suggested that the changes will mean that “new builds will become more important” to investor clients.

“Brokers who understand construction lending, progress payments, land registration, valuation risk, builder due diligence and new-build investor policy will be better placed to capture demand,” he said.

This sentiment was shared by Sam White, CEO of Loan Market and executive chairman of Loan Market Group, who suggested investors could favour new builds, while owner-occupiers could favour existing property.

“The result of this would be investment properties, and therefore renters, being more focused in new-build higher density areas or in outskirts of cities where new developments are,” White said.

“The changes could lead to aspiring investors changing their plans or choosing to not invest in property at all. We could also see some investors’ bids withdrawn.

“Overall, that could mean lower price growth and less competition for existing properties, which could benefit people looking to buy a home to live in.

“The policy proposal is shaped around encouraging investors to purchase new builds, with the idea it will lead to more supply. Issues that will continue are growing construction costs and shortage of skilled workers in residential construction. These factors will limit the number of new developments.”

Serviceability was also flagged as a “battleground”, with Bednar saying: “In a cost-of-living environment, brokers who can help clients understand spending, reduce unnecessary debt and prepare properly before an application will be in a stronger position.”

Bednar added that brokers should also be tailoring marketing, education, and client engagement to “buyers who need guidance through deposits, grants, schemes, serviceability and lender selection”.

He also flagged that infrastructure investment for housing could also create new “lending corridors” in the regions and that first home buyers would likely remain a key market.

Mark Haron, executive director at Connective, echoed this sentiment, noting: “For first home buyers, it means they could face less competition from investors in established properties. For investors, we’re likely to see more focus move towards new builds, where incentives still apply.

“Clients are trying to make sense of a lot at once, and they’re looking for clear, practical guidance. Brokers who step in early, explain what’s proposed in plain terms, and help clients work through their options will be the ones who build trust and stay ahead.”

Alarms raised about housing tax changes

However, CEO of ASX-listed aggregator Australian Finance Group (AFG), David Bailey, said that the group was concerned that the reforms may shift demand rather than solve the underlying problem.

Speaking to The Adviser, Bailey said: “Directing negative gearing toward new builds is a logical policy intent, but AFG would be cautious about assuming it delivers a meaningful supply uplift on its own. New housing remains constrained by planning, infrastructure, labour shortages, construction costs and finance conditions. There is also a risk that investors crowd into a narrower new-build segment, pushing up prices there rather than materially increasing total supply.

“Younger buyers need more homes, better access to credit and greater confidence in long-term affordability. Reducing investor participation may ease competition in some segments in the short term, but if it also weakens rental supply or construction activity, the affordability challenge simply reappears elsewhere.”

The AFG CEO said he was also concerned that the CGT changes “reach well beyond residential property”.

“Applying the reforms to shares, commercial assets and small business interests may affect investment appetite more broadly,” he warned.

“That matters because small businesses rely on capital, risk-taking and asset investment.

“This does mark a structural shift in how investor clients will need to be serviced. Brokers should be helping clients stress-test scenarios, understand borrowing capacity, consider cash flow under different tax settings and seek appropriate tax advice. The broker role becomes less about rate comparison alone and more about helping clients navigate complexity, structure lending appropriately and make decisions suited to their individual circumstances.”

The Commercial & Asset Finance Brokers Association (CAFBA) has also raised alarms regarding the density of the new rules. The association thinks the housing tax changes are net negative, stating the extremely complex new rules, transitioning provisions, and ongoing valuations requirements will lead to a myriad of unintended consequences, encouraging behavioural change aimed at avoidance.

CAFBA expressed disappointment over changes to CGT and negative gearing provisions, including the end of the 50 per cent CGT discount and the implementation of a 30 per cent minimum CGT rate, alongside limitations on negative gearing to new properties.

CAFBA CEO David Bushby said: “We are deeply concerned that these complex new rules and valuation requirements will adversely impact our members and their commercial clients, leading to unintended consequences and possibly encouraging avoidance behaviour in the market.”

What about SME lending?

While housing dominates the headlines, brokers are also being urged to guide small-business clients through the permanent $20,000 instant asset write-off (IAWO).

Haron welcomed the decision to make the instant asset write-off permanent at $20,000, noting it removes the uncertainty that came with short-term extensions and gives SMEs more confidence to invest in equipment and manage cash flow.

“Having that consistency gives SMEs more confidence to invest in equipment, upgrade systems, and manage cash flow without second-guessing next year’s rules,” he said.

However, CAFBA’s advocacy chair, David Gandolfo OAM, said while it was a small step in the right direction, the association was disappointed that eligibility remains limited to businesses with annual turnover below $10 million, and the $20,000 threshold falls well short of the $150,000 limit sought by industry bodies.

Bushby added: “In the current uncertain economic environment, businesses need certainty from government and greater tax support to invest in vehicles, equipment and productive assets that drive expansion and employment. However, if the deductible threshold and turnover limits are not increased, the announced decision will fail to achieve its full economic benefit potential.”

Speaking from a lender perspective, Barry Saoud, Pepper Money’s CEO of mortgages and commercial lending, said the budget was creating “both urgency and evolution”.

“In the near term, brokers who move quickly can help investors navigate change and lock in opportunities before transitional settings expire. Over time, success will increasingly depend on structural knowledge – understanding different ownership vehicles, lending outside personal names, and when non-bank options make sense,” Saoud said.

“Change brings complexity, but it also brings opportunity. Brokers who invest in capability now, communicate clearly with clients and choose the right lender will be well placed to support investor clients.”

Saoud recommended that brokers “reach out to investor clients now, explain what’s changing and move fast to progress deals within transitional windows” and also make sure they’re well versed in lending to companies, trusts, and super funds, as well as construction offerings for those wishing to pursue new builds.

What do you think of the budget 2026–27 measures? Let us know in the comments below!

[Related: Government to reform housing tax]