THE 25 YEAR SHIFT: How Labor’s budget just rewrote property

The federal budget just delivered the biggest shake-up to negative gearing, capital gains tax, and property trust structures in 25 years. In this episode of Money on the Mic, Darren and Brodie unpack exactly what Treasurer Jim Chalmers has changed and what it means for Australian property investors.THE BREAKDOWNWhy Labor just reversed their negative gearing promise - and what’s grandfathered.How the new-build exception is designed to push investor capital into housing supply.What the capital gains tax indexation model actually means with real worked numbers.Why CGT reform could help investors in a stagflation economy, not hurt them.How the new flat 30% tax on discretionary trust distributions changes mum-and-dad investing.Why property investors are likely to pivot to company structures, and what franking credit reform could mean next.CGT DISCOUNT WORKINGSExample 1 Moderate inflation, strong investment returnCurrent system (50% discount)You buy shares for: $100,000Sell 10 years later for: $200,000Capital gain: $100,000Held >12 months, so taxable gain becomes: $50,000If your marginal tax rate is 47%: Tax = $23,500Inflation-indexed systemAssume inflation averaged 3% per year for 10 years.Your indexed cost base becomes roughly: $134,000So your real gain is: $200,000 − $134,000 = $66,000Taxable gain: $66,000At 47% tax: Tax = about $31,000ResultSystem Tax 50% Discount $23,500Inflation indexing $31,000 You pay more tax under indexing because the asset strongly outperformed inflation.Example 2 High inflation, weak real growthCurrent system (50% discount)You buy an investment property: $500,000Sell 15 years later: $800,000Nominal gain: $300,000Current 50% discountTaxable gain:$150,000At 47%:Tax = $70,500Inflation-indexed systemAssume inflation averaged 4% for 15 years.Indexed cost base becomes roughly: $900,000+Meaning: You actually made no real gainUnder a pure inflation-indexed model:Taxable gain = $0ResultSystem Tax 50% Discount $70,500Inflation indexing $0This is where indexing massively benefits investors.CONNECT WITH FUNDDSubscribe and follow the podcast for weekly deep dives into the Australian lending landscape.Got a question? Drop it in the comments below or reach out to the team via our website https://fundd.com.au/contact/.Follow us on Socials:Facebook:  / fundd.com.auInstagram:  / fundd.com.auLinkedin: https://www.linkedin.com/company/control-finance-aus/?viewAsMember=trueThis podcast provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.All information is correct at the time of filming