If the negative gearing changes, CGT overhaul and SMSF ban represent the legislative assault on property investors, then the simultaneous crackdown on trust lending by major banks represents the commercial response. Together, these forces have fundamentally changed the landscape for anyone who holds — or was planning to hold — investment property through a family trust or discretionary trust structure.^[12]

The 30% Minimum Tax on Discretionary Trusts

From 1 July 2028, a new 30% minimum tax will apply to the taxable income of all discretionary trusts in Australia. There are currently over 900,000 family trusts in Australia, many of which may be affected. The mechanism works as follows:^[6]

•       Trustees pay a minimum 30% tax on the trust’s taxable income each year, irrespective of how that income is distributed to beneficiaries

•       Beneficiaries continue to declare distributions in their personal tax returns

•       Non-corporate beneficiaries receive non-refundable tax credits for the tax paid at the trust level, which can reduce their personal tax liability^[17]

•       Beneficiaries on marginal rates above 30% pay a top-up at their personal marginal rate^[17]

•       Beneficiaries on marginal rates below 30% — such as non-working spouses, retirees, or adult children with low income — effectively lose the tax benefit of having distributions directed to them^[15]

•       Corporate beneficiaries do not receive credits, which prevents trusts from distributing to companies taxed at 25% to bypass the minimum tax^[17]

The minimum tax does not apply to fixed trusts, widely held trusts, complying superannuation funds, special disability trusts, deceased estates, or charitable trusts. Primary production income and income from assets of discretionary testamentary trusts existing at the time of the Budget announcement are also excluded. However, testamentary trusts established after 12 May 2026, and new assets contributed to existing testamentary trusts after that date, are not protected.^[5]

The Triple Hit on Trust-Held Investment Property

For property investors who hold residential investment property through a discretionary trust, the 2026 Budget delivers a compounding triple impact that is far greater than the sum of the individual parts:^[14]

•       Negative gearing is quarantined for properties acquired after 12 May 2026 — losses can only be offset against residential property income within the trust

•       Capital gains from 1 July 2027 are subject to indexation rather than the 50% discount, with the 30% minimum tax floor applying to real gains

•       From 1 July 2028, the underlying trust income itself is subject to the trustee-level 30% minimum tax^[14]

Existing residential properties held in discretionary trusts at 7:30pm AEST on 12 May 2026 are grandfathered for negative gearing purposes. In relation to these grandfathered properties, losses can continue to be applied against the trust’s other income until those properties are sold. But any new residential property acquired through the trust faces all three layers simultaneously.^[14]

This policy configuration signals a clear government preference: institutional capital over private family trust investment in residential property. The carveouts for widely held trusts and build-to-rent developments, combined with the retention of the affordable housing CGT discount, suggest that going forward the favoured structure for substantial residential investment is institutional, supply-creating, or government-aligned.^[5]

The Lender Retreat: Banks Pull Back from Trust Lending

Before the Budget was even handed down, the major banks had already begun retreating from trust lending — a trend that now combines with the new tax regime to create serious obstacles for trust borrowers.^[20]

In October 2025, Macquarie Bank — which held approximately 5.9% of the Australian mortgage market and originated 94% of its loans through the broker channel — announced an immediate pause on all new home loan applications where the borrower is a trust or company. Macquarie had been widely regarded by brokers as the leading lender for trust and company structures. Its withdrawal was described by industry professionals as a ‘bombshell’ and the end of ‘the golden era of unlimited borrowing capacity’.^[28]

Macquarie cited two primary reasons for its withdrawal: first, the emergence of social media-driven strategies promoting trust structures as a way to bypass normal serviceability limits; and second, the incoming Anti-Money Laundering Tranche 2 regulations, which impose additional identity verification requirements for trust and company loan applications, making them significantly more complex and time-consuming to originate.^[22]

Commonwealth Bank followed in November 2025, announcing it would only lend to trusts and companies where the guarantor has an existing banking relationship with CBA of at least six months. This requirement applies specifically to broker-introduced applications. St. George Bank quietly pulled out of trust lending entirely around the same period.^[25]

From 1 February 2026, APRA introduced a new Debt-to-Income (DTI) cap requiring APRA-regulated lenders to limit the share of new investment loans to borrowers with a debt-to-income ratio of six or more to a maximum of 20% of new lending. This ‘macro-prudential’ measure has further constrained borrowing capacity for highly leveraged investors, including many who use trust structures.^[24]

  Current Trust Lending Landscape — Where Things Stand

  Macquarie Bank: Paused all new trust/company lending (from 30 Oct 2025)

  Commonwealth Bank: Existing 6-month relationship required for trust borrowers

  St. George Bank: Withdrawn from trust lending

  ANZ, NAB, Westpac: Still lending to trusts, but with rigorous assessment

  Non-bank lenders: Increasing trust lending volumes, but often higher rates

  APRA DTI cap (from Feb 2026): Max 20% of new loans at DTI >6x

  Sources [13, 24, 25]: FINSTREET / Aus Investment Properties / MPA, 2026

What This Means If You Hold Property in a Trust

For investors currently operating through family trust structures, the picture is complex. William Xin, founder and director of Xin Mortgage, observed that trust and company lending is ‘likely to follow a similar path to SMSF lending — gradually becoming a preferred segment for non-bank lenders’ as the major banks continue tightening.^[25]

There is a planning window available before the trust minimum tax commences on 1 July 2028. Rollover relief is available for three years from 1 July 2027 for taxpayers wishing to restructure out of a discretionary trust into a company or fixed trust, with relief from income tax consequences including CGT. Small businesses and others contemplating this restructure should note that state stamp duty consequences can be material — particularly in Victoria, New South Wales and Western Australia where trust-to-company transfers may attract substantial duty on property holdings.

For borrowers who need to restructure, private and non-bank lenders are becoming an increasingly practical option. Private lending can assist with the tax liability arising from restructuring, transitional financing while the new structure is established, or the acquisition of additional property into the new entity, particularly where the new structure is better suited to commercial property or new builds.^[15]

If you hold investment property through a family trust, now is the time to review your structure — not in 2027 when the CGT rules commence, and not in 2028 when the trust tax lands. The planning window is now. Speak with both your accountant and your mortgage broker together, because the tax and the lending decisions cannot be made in isolation.

Sources

All sources were accessed in late June and early July 2026. Inline references in the body of this blog correspond to the numbered sources below.

[1]  RBA Official Media Release — 5 May 2026 Rate Decision       Reserve Bank of Australia. Statement by the Monetary Policy Board. Decision to raise cash rate by 25bp to 4.35%, voted 8-1. rba.gov.au/media-releases/2026/mr-26-12.html

[2]  ClearTax.com.au — SMSF Borrowing Banned: What the New Rules Mean for You       Overview of LRBA ban announced 23 June 2026, Greens deal, bare trust mechanics, implementation timeline and government figures. cleartax.com.au/tax/news-and-updates/smsf-borrowing-banned

[3]  Trading Economics — Australia Interest Rate / RBA June 2026 Summary       Unanimous hold at June 2026 meeting; May 2026 Board minutes analysis; ‘not sufficiently restrictive’ assessment. tradingeconomics.com/australia/interest-rate

[4]  Hudson Financial Planning — SMSF Property Loan Ban 2026       SMSF CGT exclusion from discount changes confirmed; concessional super tax rates retained; LRBA implementation timeline. hudsonfinancialplanning.com.au

[5]  Holding Redlich — Federal Budget 2026-27: Three Tax Changes Reshaping Investment, Trust Structures and Business Planning       Authoritative legal analysis of trust reforms including triple-impact on trust-held residential property, testamentary trust exclusions, rollover relief, state stamp duty warnings, and government preference for institutional capital. holdingredlich.com

[6]  NAB Business — 2026 Federal Budget: What It Means for Individuals       30% minimum discretionary trust tax announcement; 900,000 family trusts potentially affected; trust exclusions; widely held trust carveout. business.nab.com.au

[7]  The Adviser — Industry Briefing, week of 25 June 2026 (client-supplied document)       Primary source for lender serviceability update timeline; negative gearing eligibility and cutoff rules; CGT examples and retiree impact; CPA compliance cost estimates; SMSF LRBA ban; ministerial quotes; fairness analysis including $80 vs $255/week holding cost comparison.

[8]  ORDE Financial — Servicing Policy Update, 29 June 2026 (via client-supplied document)       Full eligibility scenarios for negative gearing: commercial property, equity releases for shares, owner-occupied conversions, new-build scenarios.

[9]  Westpac — Credit Policy Update, 29 June 2026 (via client-supplied document)       Mandatory broker procedures: separate assessment of negative gearing vs RITD; updated serviceability calculator; ApplyOnline documentation; borrower declarations.

[10]  Perpetual Wealth — Federal Budget 2026 Analysis       Negative gearing quarantine mechanics; 30% minimum trust tax structure; beneficiary credit treatment; corporate beneficiary rules; recommendation to await final legislation. perpetual.com.au/insights/federal-budget-2026

[11]  SuperGuide — Federal Budget 2026 Overview       Updated budget overview incorporating 23 June 2026 Greens amendments; SMSF LRBA ban; 83% of CGT discount flowing to top 10% of earners. superguide.com.au

[12]  BrokerBros — Australian Federal Budget 2026: What It Means for Interest Rates, Property Investors, Home Loans & the Future of Australian Property       Discretionary trust 30% minimum tax; structural shift toward SPVs and corporate structures; lender tightening on trust/company lending. brokerbros.com.au

[13]  FINSTREET — Australian Mortgage Lending Outlook 2026: DTI Limits, Trust Lending Changes       Macquarie pause on trust lending (early 2026); CBA tightening; trend toward non-bank lenders for trust borrowers; broker strategy implications. finstreet.au

[14]  Holding Redlich — Federal Budget 2026-27 (triple-impact analysis)       Detailed analysis of the compounding three-layer tax impact on discretionary trust-held residential property: negative gearing quarantine + CGT indexation + 30% trustee minimum tax. holdingredlich.com

[15]  Secured Lending — Australia’s New Trust Tax Rules in 2026: What Property Investors Need to Know       30% minimum tax mechanics and effect on low-rate beneficiaries; private lending for restructure funding; rollover window analysis. securedlending.com.au

[16]  Latitude Accountants — Negative Gearing Changes 2026: What Investors Need to Know       Borrowing capacity reduction estimates of 20–30%; impact by borrower segment (first-time buyers, mum-and-dad investors, developers, high-income earners). latitudeaccountants.com.au

[17]  Perpetual Wealth / NAB — Budget Negative Gearing Rules (trust scope)       Negative gearing changes apply to individuals, partnerships, companies and most trusts; widely held trusts and superannuation funds excluded. perpetual.com.au / business.nab.com.au

[18]  Commonwealth Bank — 2026 Budget: Updated Housing Outlook       CGT discount replacement with indexation and 30% minimum; removal of negative gearing equivalent to 90–155bp increase in investor mortgage costs; price growth forecast revised to 3% for Dec 2026. commbank.com.au

[19]  Finance Monthly / Aus Investment Properties — How Mortgage Brokers Help Property Investors Maximise Borrowing Power in 2026       APRA 3% serviceability buffer; DTI cap from February 2026; trust income assessment in broker serviceability calculations. finance-monthly.com

[20]  Macquarie Bank / Broker Daily — Macquarie Bank to Pause New Lending to Trusts and Companies (30 October 2025)       Immediate pause on all new trust and company home loan applications from 31 October 2025; existing loans unaffected; AML Tranche 2 and social media finfluencer cited as reasons. brokerdaily.au

[21]  Broker Daily — Macquarie’s Halt on Trust and Company Loans Will ‘Reshape’ Broker Strategies (November 2025)       Industry broker reaction; Eva Loisance ‘pushback against loophole-driven lending’; Matt Turner on significance; St. George Bank withdrawal; prediction more lenders will follow. brokerdaily.au

[22]  Yahoo Finance / YourLifeChoices — Macquarie Bank’s ‘Bombshell’ Mortgage Move (October 2025)       94% of Macquarie loans through broker channel; Azure Financial Max Harris ‘golden era ending’ quote; ASIC finfluencer crackdown context. au.finance.yahoo.com / yourlifechoices.com.au

[23]  Capital Brief — CBA Joins Macquarie in Pulling Back from Trust Lending (January 2026)       CBA tightening on trust and company lending post-Macquarie; APRA signalling macro-prudential measures; finfluencer TikTok strategies cited. capitalbrief.com

[24]  Aus Investment Properties — What the New Macquarie & CBA Lending Clamp Down Means for Property Investors       APRA DTI cap from 1 February 2026: maximum 20% of new loans at DTI >6x; CBA six-month relationship requirement; non-bank lender alternative. ausinvestmentproperties.com.au

[25]  Mortgage Professional Australia — Why Have Macquarie, CBA Restricted Brokered Company and Trust Lending? (November 2025)       William Xin forecast that trust lending will shift to non-bank lenders; ANZ, NAB, Westpac still lending; regulatory risk weighting increases. mpamag.com

[26]  Aussie Home Loans — RBA May 2026 Rate Decision Analysis & Expert Predictions       Bank-by-bank rate forecasts (NAB, Westpac, ANZ, CBA); Canstar repayment estimates; 11 lenders cutting variable rates post-May hike. aussie.com.au

[27]  Westpac IQ Economics — RBA June 2026 Decision Analysis       Post-meeting hawkish language analysis; ‘stronger steer than in recent communication’; Westpac August/September hike forecast. westpaciq.com.au

[28]  NexGen Lending / YourLifeChoices — Macquarie Bank Pulls Out of Trust Lending: What It Means for You       Trust lending mechanics; Macquarie’s 5.9% market share; 94% broker-originated; AML Tranche 2 context; alternatives for trust borrowers. nexgenlending.com.au

[29]  GrowSMSF — SMSF Borrowing Banned: What the Labor-Greens LRBA Deal Means for You       Confirms Senate passage (35-25), House agreement (98-39) on 25 June 2026, and Royal Assent on 26 June 2026; confirms 10 August 2026 commencement date; explains contract-exchange protection rule. growsmsf.com.au/smsf-lrba-ban-2026

[30]  Hudson Financial Planning — SMSF Property Loan Ban 2026: What the Deadline Means for You       Clarifies that protection depends on contract signing date, not loan approval or settlement; SMSF establishment costs and timelines. hudsonfinancialplanning.com.au

[31]  iCare Super — SMSF Residential Property LRBA Ban Now Law – 10 August 2026 Deadline Confirmed       Confirms Royal Assent granted 26 June 2026 and commencement date of 10 August 2026; practical guidance for trustees, lenders and solicitors working within the compressed timeframe. icaresmsf.com.au

[32]  EEA Advisory — What the Proposed LRBA Ban Means for SMSF Investors       Explains the ‘business real property’ legal test under section 66 of the SIS Act; confirms residential dwellings do not meet this test; clarifies unleveraged residential purchases remain permitted. eea-advisory.com.au

[33]  ClearTax.com.au — SMSF Borrowing Banned: What the New Rules Mean for You (pre-passage version)       Early coverage as at 23 June 2026 noting the change was then still proposed; background on LRBA mechanics since 2007. cleartax.com.au

[34]  SMSF Adviser — More Details of LRBA Ban But Criticism Keeps Coming       SMSF Association criticism of lack of consultation; Treasurer Chalmers’ $50 million fiscal estimate and SMSF market-share figures; SMSF Association policy lead comments on new-build exclusion; refinancing uncertainty under ATO guidance. smsfadviser.com

[35]  SMSF Australia — SMSF Residential Property LRBA Ban: What You Need to Know       Confirms 10 August 2026 commencement following 26 June 2026 Royal Assent; explains the amended SIS Act clause; bare trust and finance approval practical timeline guidance. smsfaustralia.com.au

[36]  Heffron — LRBA Ban: What the Proposed Change Means for SMSFs       Detailed legal explanation of the ‘single acquirable asset’ and ‘business real property’ conditions; confirms no new-build exception unlike negative gearing reforms; commercial/business real property carve-out mechanics. heffron.com.au

[37]  The Adviser — Government Agrees to Ban Future LRBAs for Resi       Joint statement from PM Albanese and Treasurer Chalmers; Greens negotiating position and rationale; confirmation that existing arrangements and time to finalise transactions in train are protected; $50 million budget impact figure. theadviser.com.au

Disclaimer: This blog contains general information only and is intended for educational purposes. It does not constitute financial, tax or legal advice. Phil Aldridge is a licensed mortgage broker and does not provide tax advice. Please consult a qualified accountant, financial adviser or solicitor regarding the impact of these legislative changes on your individual circumstances. All figures are indicative only. Information current as at early July 2026.