May 27, 2026 | Investment Property, Self Managed Super Fund (SMSF), Self Managed Super Fund (SMSF), Tax Planning
💡 The 2026 Budget didn’t change the SMSF property rules — but it made them significantly more attractive. Here’s why more investors are taking a serious look.
There are over 625,000 self-managed super funds in Australia, collectively holding more than $990 billion in assets. As the Budget makes established investment property less tax-effective for individual investors, the SMSF structure offers something the new rules can’t touch: a concessional tax environment built for the long term.
The Numbers at a Glance
SMSF rental income taxed at
15%
vs. up to 47% at individual marginal rates
CGT on assets held 12+ months
10%
vs. 30%+ minimum under new budget rules
CGT in pension phase
0%
within transfer balance cap ($2M for FY26)
SMSFs in Australia
625K+
holding $990B+ in total assets (ATO 2025)
The Tax Comparison is Compelling
TAX RATE COMPARISON — SMSF VS. INDIVIDUAL
Individual rental (top rate)
CGT new rules min (post-2027)
SMSF rental (accumulation phase)
CGT in SMSF (held 12+ months)
CGT in SMSF (pension phase)
Key takeaway: SMSF investors pay 15% tax on rental income vs. up to 47% individually — and just 10% CGT on gains vs. 30%+ under the new Budget rules.
*Within $2M transfer balance cap (FY26). General information only — not financial advice. Sanford Finance Pty Ltd — ACL 388372.
The Rules Haven’t Changed — But Your Opportunity Has
The Budget did not alter SMSF property investment rules. An SMSF can still purchase residential investment property using a Limited Recourse Borrowing Arrangement (LRBA), provided the fund meets the sole purpose test, the property is not occupied by any member or related party, and the investment aligns with the fund’s documented strategy. What has changed is the relative attractiveness of the SMSF path — because the alternative just became significantly more expensive.
Who Is SMSF Property Right For?
SMSF property is worth considering if you are:
- A high-income earner with a long investment horizon
- A business owner looking to hold commercial property in your SMSF
- Someone with an existing super balance above $200,000–$300,000
- Comfortable with the compliance requirements and illiquidity of property as an asset class
- Planning for retirement and wanting to maximise tax-free income in pension phase
What You Need to Know Before You Start
SMSF lending is a specialist product. Not all lenders offer it, and those that do apply stricter criteria — typically requiring a larger deposit, evidence of fund liquidity, and a minimum balance of $200,000–$300,000. The loan is assessed on the fund’s income, not the member’s, and the property must be held in a separate bare trust until the loan is fully repaid.
Division 296, which introduces a 30% tax on earnings above $3 million in super, passed Parliament in March 2026 and takes effect from 1 July 2026. For most clients this threshold is not a concern — but for those with larger balances, it is worth discussing structuring options with your adviser.
How Sanford Finance Can Help
At Sanford Finance, we work with specialist SMSF lenders and can help you assess whether this strategy suits your situation, structure the lending correctly, and ensure your investment meets ATO compliance requirements from day one. Talk to us before you move.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. Sanford Finance Pty Limited — Australian Credit Licence 388372. Always seek professional advice before acting.
May 27, 2026 | Economic News, Investment Property, Tax Planning
⚡ Time-sensitive: The grandfathering date is 12 May 2026. Properties purchased before that date are protected under the old rules. Speak to your Sanford Finance adviser before making any moves.
On Budget night — 12 May 2026 at 7:30pm — the goalposts shifted for Australian property investors. The changes announced by Treasurer Jim Chalmers will directly affect your tax position, your borrowing strategy, and potentially your retirement outcomes. Here is what changed, what stayed the same, and what you can still do before 1 July 2027 when the new rules take effect.
What Changed: Negative Gearing
From 1 July 2027, negative gearing will only be available on new residential builds. If you purchase an established investment property after Budget night, you will no longer be able to offset rental losses against your other income once the reforms commence. Properties purchased before 12 May 2026 are fully grandfathered — your existing portfolio is protected.
What Changed: Capital Gains Tax
The 50% CGT discount — which has allowed investors to halve their taxable capital gain on assets held more than 12 months — will be replaced by an inflation-indexed model with a minimum 30% tax on gains from 1 July 2027. For new builds, investors may choose between the 50% discount or the new arrangement. For established properties purchased after Budget night, the 50% discount will not apply to gains arising after 1 July 2027.
Before vs. After: At a Glance
| Policy Area |
Before Budget Night |
From 1 July 2027 |
| Negative gearing — established |
✓ Offset losses vs income |
✗ Abolished |
| Negative gearing — new builds |
✓ Available |
✓ Still available |
| CGT discount — established |
50% after 12 months |
Inflation-indexed + 30% min |
| CGT discount — new builds |
50% after 12 months |
Choose 50% or new model |
| Existing portfolio (pre-Budget) |
Current rules apply |
✓ Fully grandfathered |
| Commercial property |
Current rules apply |
✓ Appears unaffected |
The Real Dollar Impact: Tax on a $200,000 Capital Gain
EFFECTIVE TAX PAYABLE — $200,000 CAPITAL GAIN
Investor on 47% marginal tax rate, asset held 12+ months
Old rules
(50% CGT discount)
New rules (post-2027)
(30% minimum tax)
No discount
(full marginal rate)
Key takeaway: The new rules add over $13,000 in extra tax on a single $200,000 gain compared to the old 50% discount.
Illustrative only. General information — not financial advice. Sanford Finance Pty Ltd — ACL 388372.
For an investor on a 47% marginal tax rate selling an established property with a $200,000 capital gain held more than 12 months: under the old rules with the 50% discount, tax payable was $47,000. Under the new rules from 1 July 2027, the minimum tax payable rises to $60,000 or more — that is over $13,000 more going to the ATO on a single sale.
What This Means for Your Strategy
For investors with existing portfolios, the news is good — nothing changes. For those looking to grow, the calculus has shifted significantly. New builds now carry a structural tax advantage over established properties. Commercial property may emerge as an attractive alternative as it appears unaffected by the reforms. SMSF structures — which have their own concessional tax environment — also become considerably more compelling.
Before making any moves, speak with your Sanford Finance adviser. The interaction between these changes, your income, your existing holdings, and your loan structure is complex — and the right strategy will look different for every client.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. Sanford Finance Pty Limited — Australian Credit Licence 388372. Always seek professional advice before acting.
Oct 13, 2025 | Investment Property, Property Market, Real Estate, Refinance
With Australian property prices projected to rise significantly over the next 12 months, existing homeowners have a unique opportunity to leverage their equity and enter the investment property market before the window closes.
The Perfect Storm: Why Now is the Time to Act
If you already own a home in Australia, you’re likely sitting on a substantial asset that has appreciated significantly over the years. But here’s what many homeowners don’t realize: that equity in your home could be the key to building long-term wealth through property investment—and the opportunity to act is narrowing rapidly.
The expanded 5% Deposit Scheme that came into effect on October 1st is already driving unprecedented demand in the property market. Independent analysts forecast property prices could rise by 3.5% to 9.9% nationally in 2026 alone, with first home buyer target areas seeing even higher growth. This surge in demand creates a compelling opportunity for existing homeowners to leverage their equity and secure investment properties before prices rise further.
At Sanford Finance, we’re already seeing savvy homeowners making this move. Here’s everything you need to know about using your home equity to build an investment property portfolio.
Understanding Home Equity: Your Hidden Asset
Before we explore how to use equity for investment, let’s clarify what it actually is.
Equity is simply the difference between your property’s current market value and what you still owe on your mortgage.
For example, if your home is currently valued at $750,000 and you have $400,000 remaining on your mortgage, you have $350,000 in equity.
But not all of that equity is accessible. This is where useable equity comes in.
Calculating Your Useable Equity
Banks are generally comfortable lending up to 80% of your property’s value. Your useable equity is calculated as:
Useable Equity = (Property Value × 80%) – Current Loan Balance
•Property value: $750,000
•80% of property value: $600,000
•Minus current loan: $400,000
•Useable equity: $200,000
This $200,000 is what you can potentially access to use as a deposit on an investment property.
The “Rule of Four”: How Much Can You Invest?
A useful guideline in property investment is the Rule of Four, which suggests your maximum investment property purchase price should be approximately four times your useable equity.
In our example, with $200,000 in useable equity, you could potentially purchase an investment property worth up to $800,000.
Here’s how the numbers work:
•Investment property price: $800,000
•Required 20% deposit: $160,000 (from your useable equity)
•Additional costs (~5%): $40,000 (also from useable equity)
•Total equity required: $200,000
This approach allows you to avoid Lenders Mortgage Insurance (LMI) on the investment property while keeping your existing home loan intact.
Why Property Prices Are About to Surge
The timing for this strategy has never been more critical. Here’s why property prices are projected to rise significantly over the next 12 months:
The 5% Deposit Scheme Effect
The expanded scheme has removed income caps and dramatically increased price caps across Australia. This has unleashed a wave of first home buyers into the market, creating intense competition for properties under the scheme’s price caps.
Real-world evidence is already emerging:
•Western Sydney properties jumped from $750,000 to $900,000 virtually overnight
•Mortgage brokers report “unprecedented demand” with buyers “literally queuing up”
•Properties in high-demand suburbs are receiving 100-150 enquiries per listing
Independent Forecasts vs. Government Projections
While Treasury modestly projects a 0.5% price increase over six years, independent economic analysis firm Lateral Economics forecasts:
•3.5% to 6.6% national price growth in 2026 alone
•5.3% to 9.9% in areas targeted by first home buyers
•Continued strong growth for several years afterward
Capital City Growth Projections
|
City
|
12-Month Projection
|
Current Monthly Growth
|
|
Perth
|
9-14%
|
1.6% (Sept)
|
|
Brisbane
|
8-12%
|
1.2% (Sept)
|
|
Adelaide
|
7-11%
|
1.0% (Sept)
|
|
Sydney
|
7-10%
|
0.8% (Sept)
|
|
Melbourne
|
5-8%
|
0.5% (Sept)
|
Source: Cotality September 2025 data, Lateral Economics projections
The Wealth-Building Advantage for Existing Homeowners
While first home buyers scramble to enter the market with minimal deposits, existing homeowners have a significant advantage: you can leverage your equity to secure investment properties in high-growth areas before prices surge.
Here’s why this strategy is so powerful:
1. Dual Property Appreciation
When you own two properties, you benefit from capital growth on both. If property prices rise by 8% over the next year:
•Your $750,000 home increases to $810,000 (+$60,000)
•Your $800,000 investment property increases to $864,000 (+$64,000)
•Total equity gain: $124,000
This is wealth creation through leverage—your initial $200,000 equity investment has generated returns on $1.55 million worth of property.
2. Rental Income Support
Unlike first home buyers who must service their entire mortgage from their income, your investment property generates rental income that helps cover the loan repayments.
For an $800,000 property in a high-demand area:
•Expected rental income: $650-750 per week
•Annual rental income: $33,800-$39,000
•Helps offset loan repayments and expenses
3. Tax Benefits Through Negative Gearing
If your investment property expenses exceed the rental income (which is common in the early years), you can offset this loss against your taxable income.
•Annual rental income: $36,000
•Annual expenses (interest, rates, insurance, etc.): $45,000
•If you’re in the 37% tax bracket, this could reduce your tax by approximately $3,330
This means the actual cost of holding the property is lower than it appears, while you benefit from capital growth.
4. Building Long-Term Wealth
Property investment is a long-term wealth-building strategy. Over a 10-20 year period, you benefit from:
•Capital growth on both properties
•Loan principal reduction through rental income
•Tax benefits that improve cash flow
•Potential to leverage further as equity builds
How to Access Your Equity: Three Main Options
1. Refinancing Your Home Loan
This involves replacing your existing home loan with a new, larger loan that includes the equity you want to access.
•Potentially access better interest rates
•Consolidate to one lender
•May incur break costs if on a fixed rate
•Application and valuation fees
2. Top-Up Your Existing Loan
This increases your current loan amount without changing your existing loan terms.
•Simpler process than refinancing
•Maintain existing loan features
•Limited to your current lender
•May not get the best available rate
3. Home Equity Loan or Line of Credit
A separate loan secured against your property’s equity, often with flexible access.
•Flexible access to funds
•Only pay interest on what you use
•Keep existing home loan separate
•Typically higher interest rates
•Requires discipline to manage effectively
Strategic Timing: The Early Mover Advantage
The data clearly shows that those who act quickly will benefit most from the current market dynamics. Here’s why:
Price Inflation is Already Happening
Sydney mortgage broker James Watson told The Australian Financial Review that the scheme is “a sugar hit that will benefit the early movers but will disadvantage future buyers.”
He cited clients whose budgets of $1.15 million ended up at $1.3 million due to increased competition—and this is just the beginning.
The Compounding Effect
Every month you wait, property prices continue to rise. Consider this scenario:
•Investment property: $800,000
•Required deposit (20%): $160,000
•Your equity covers this comfortably
Waiting 6 Months (assuming 4% growth):
•Same property now: $832,000
•Required deposit (20%): $166,400
•Additional equity needed: $6,400
•Plus you’ve missed 6 months of rental income and capital growth
Waiting 12 Months (assuming 8% growth):
•Same property now: $864,000
•Required deposit (20%): $172,800
•Additional equity needed: $12,800
•Plus you’ve missed 12 months of rental income and capital growth
The longer you wait, the more equity you’ll need and the less advantageous the investment becomes.
Choosing the Right Investment Property
Not all investment properties are created equal. Here’s what to look for in the current market:
1. High-Growth Areas
Focus on suburbs that are:
•Below the 5% Deposit Scheme price caps (high demand)
•Showing strong rental yields
•In areas with infrastructure development
•Attracting population growth
2. Strong Rental Demand
Look for properties with:
•Proximity to employment hubs
•Good schools and amenities
•Features that appeal to renters (parking, outdoor space)
3. Realistic Cash Flow
Ensure you can comfortably service the loan even with:
•Potential vacancy periods
•Maintenance and repair costs
•Property management fees
Risk Management: Protecting Your Investment
While using equity to invest in property can be highly rewarding, it’s essential to manage the risks:
1. Maintain a Buffer
Keep 3-6 months of expenses in reserve to cover:
•Vacancy periods between tenants
•Unexpected repairs or maintenance
•Personal income disruptions
2. Don’t Overextend
Just because you can access equity doesn’t mean you should use it all. Conservative borrowing ensures you can weather market fluctuations and maintain financial stability.
3. Diversify Your Strategy
•Different property types (house vs. apartment)
•Different locations to spread risk
•Mix of high-growth and high-yield properties
4. Professional Guidance
Work with experts who can help you:
•Mortgage broker – Find the best loan structure and rates
•Accountant – Optimize tax benefits and structure
•Financial planner – Ensure it fits your overall financial goals
•Property manager – Maximize rental returns and minimize vacancy
The Sanford Finance Advantage
At Sanford Finance, we specialize in helping homeowners unlock their equity and build wealth through strategic property investment. With over 19 years of experience and access to 40+ lenders, we can help you:
1. Maximize Your Borrowing Capacity
We’ll help you structure your loans to access the maximum useable equity while maintaining comfortable serviceability.
2. Find the Best Rates and Terms
With access to over 40 lenders, we can compare options to find the most competitive rates and favorable terms for both your home loan and investment loan.
3. Navigate Complex Scenarios
Whether you’re self-employed, have multiple income sources, or complex financial situations, we have the expertise to find solutions.
4. Optimize Your Tax Position
We work closely with accountants to ensure your loan structure maximizes tax benefits through negative gearing and other strategies.
5. Move Quickly
In a rapidly rising market, speed matters. We can fast-track your application to ensure you don’t miss out on opportunities.
Real-World Example: The Power of Equity Leverage
Let’s look at a realistic scenario:
Sarah and Michael’s Situation:
•Own a home in Brisbane valued at $850,000
•Current mortgage: $450,000
•Combined income: $180,000
•Useable equity: $230,000 (($850,000 × 80%) – $450,000)
Their Investment Strategy:
•Purchase investment property in high-growth Brisbane suburb: $920,000
•Use $184,000 equity for 20% deposit
•Use $46,000 equity for purchase costs
•Investment loan: $736,000
•Expected rental income: $750/week ($39,000/year)
•Loan interest (6.5%): $47,840
•Tax benefit (37% bracket): $6,231
After 12 Months (assuming 10% Brisbane growth):
•Investment property value: $1,012,000
•Home value growth (8%): $68,000
•Total equity increase: $160,000
•Net position: $149,391 wealth increase (after actual costs)
This is the power of leverage in a rising market.
Taking Action: Your Next Steps
If you’re ready to explore using your equity to invest in property before prices surge further, here’s what to do:
Step 1: Get Your Property Valued
Understand your current equity position by getting an up-to-date valuation of your home.
Step 2: Calculate Your Useable Equity
Use the formula: (Property Value × 80%) – Current Loan Balance
Step 3: Assess Your Borrowing Capacity
Consider your income, expenses, and ability to service additional debt.
Step 4: Speak with a Sanford Finance Specialist
Book a free consultation to discuss your options, explore loan structures, and understand your investment capacity.
Step 5: Research Investment Locations
Identify high-growth areas that align with your budget and investment goals.
Step 6: Move Quickly
In a rapidly rising market, hesitation costs money. Once you’ve done your research and received professional advice, act decisively.
The Window is Closing
The expanded 5% Deposit Scheme has created a unique market dynamic that is already driving significant price growth across Australian property markets. While first home buyers scramble to enter the market with minimal deposits, existing homeowners have a powerful advantage: the ability to leverage substantial equity to secure investment properties in high-growth areas before prices surge further.
The data is clear: independent analysts project growth of 3.5% to 9.9% in 2026, with some areas potentially seeing even higher increases. Every month you wait, property prices rise, requiring more equity and reducing the investment’s attractiveness.
But this isn’t just about timing the market—it’s about time in the market. Property investment is a long-term wealth-building strategy that benefits from both capital growth and rental income over time. The sooner you start, the longer you have to build wealth through leverage.
At Sanford Finance, we’re here to help you navigate this opportunity with expert guidance, access to the best loan products, and a strategic approach tailored to your financial situation.
Don’t let this opportunity pass you by. Contact Sanford Finance today to discuss how you can unlock your home’s equity and build long-term wealth through strategic property investment.
Ready to unlock your equity and invest in property?
Ivo De Jesus is the founder and principal mortgage broker at Sanford Finance, with over 19 years of experience helping Australians build wealth through strategic property investment.
Disclaimer
This article is intended to provide general information only and does not constitute financial advice. Property investment involves risks and may not be suitable for everyone. You should consider your own financial situation and seek professional advice from a qualified financial adviser, accountant, and mortgage broker before making any investment decisions. Past performance is not indicative of future results. Sanford Finance is a credit representative and does not provide tax or financial planning advice.
