SPV Property Investment in Australia: Structures After the 2026 Budget

What an SPV Actually Is

A Special Purpose Vehicle, or SPV, is a legal entity or arrangement set up for one defined job. In property, that job might be holding a single property, holding one part of a portfolio, running a joint purchase with a partner or keeping a development separate from everything else you own.

In Australia, an SPV is usually a company, a trust with a company as trustee, or a mix of the two. The term describes the purpose, not a legal form, so two investors who both bought "through an SPV" can be in very different positions.

A company is a separate legal entity that owns assets and pays its own tax. A trust is a relationship in which a trustee holds assets for beneficiaries under the rules of a trust deed. The trustee can be a person or a company. Within trusts there are further differences: in a unit trust, beneficiaries hold fixed units; in a discretionary trust, the trustee decides who receives income each year; hybrid trusts mix features of both.

Why Investors Consider an SPV

Most investors look at structures when a portfolio starts to feel crowded. Several loans sit in one name, borrowing becomes harder, land tax starts to bite and it becomes unclear which property is paying for which. An SPV can bring order to that by giving each asset or group of assets a defined home.

The common reasons are separating risk between assets, planning land tax across states, organising joint purchases, estate planning and clearer records. Each comes with costs: setup fees, annual accounting, compliance, possible stamp duty on later transfers and more complicated finance. A structure only earns its place if the benefit clearly outweighs those costs.

Settle the buying plan first. WTP's investment property buyers agent service covers strategy, research and due diligence before you commit, which is also the right time to involve your accountant and broker.

What Changed in 2026: The Three Budget Measures

The 2026-27 Federal Budget, delivered on 12 May 2026, announced three tax changes that matter to anyone deciding how to hold property. They are at different stages.

Treasury records that the first tranche of the negative gearing and CGT changes passed as the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. A second tranche, covering details such as the definition of a new residential dwelling and how gains are split across 1 July 2027, was open for consultation from 3 to 21 August 2026, so some fine print can still change.

Negative Gearing: Why an SPV Is Not a Way Around It

Some investors have asked whether buying in a company or trust avoids the new negative gearing limit. According to the Budget fact sheet on negative gearing and CGT reform, it does not. The changes apply to individuals, partnerships, companies and most trusts. Widely held trusts, such as most managed investment trusts, are excluded, but a typical family trust or investment company is not.

The rule itself is specific. Losses from established residential investment properties purchased from 7:30pm AEST on 12 May 2026 will only be deductible against other income from residential properties, including capital gains. Where there are excess losses, they can be carried forward to offset residential property income in future years. They are not lost, but they can no longer reduce tax on wages or business income.

Properties already held at the announcement, including where a contract had been signed but not settled, keep full negative gearing until they are sold. That grandfathering matters for structure decisions. Moving an existing grandfathered property into a new entity is a transfer to a new owner, which can trigger stamp duty and capital gains tax, and may raise the question of whether the new owner keeps the grandfathered treatment. Do not restructure an existing property without specific advice on this point.

Because each company or trust is a separate taxpayer, a loss that sits in one entity generally cannot be used by another entity or by you personally. Spreading properties across several SPVs can therefore leave quarantined losses stranded in one entity while residential income is earned in another. How the new rules interact with a multi-entity portfolio is exactly the kind of question to model with your accountant before you choose where the next property sits.

A Worked Example: The Same Loss, Before and After

The figures below are illustrative only. They are not a forecast, they ignore depreciation and many other details, and your numbers will differ.

Suppose an investor buys an established house for $750,000 in October 2026 with a $600,000 interest-only loan at an illustrative 6.2%. Annual interest is $37,200. As a long-term rental at an illustrative $650 a week, rent is $33,800 a year. Rates, insurance, management, maintenance and other holding costs add an illustrative $9,000. The property runs at a loss of $12,400 a year before depreciation.

The New Build Exception and What It Means for Structure

The negative gearing limit does not apply to new builds that genuinely add to housing supply. The Budget fact sheet describes these as dwellings constructed on vacant land, or where existing properties are demolished and replaced with a greater number of dwellings. A knock-down rebuild or a substantial renovation that does not increase the number of dwellings does not qualify.

There is a catch for later buyers. The fact sheet says a new build cannot have been previously sold, unless it was first owned by the builder and not occupied for more than 12 months. Subsequent purchasers will not be able to access negative gearing or the 50% CGT discount for that property. In other words, the concession belongs to the first investor owner.

This has two structure consequences. First, the entity that makes the first purchase matters, because that is the owner that holds the concession. Second, moving a new build into a different entity later may mean the new owner is a subsequent purchaser. Treasury's tranche 2 consultation includes the definition of a new residential dwelling, so check the final wording before you rely on the exception.

Capital Gains Tax: Indexation and a 30% Minimum

From 1 July 2027, the 50% CGT discount for individuals, partnerships and trusts is replaced by cost base indexation and a 30% minimum tax on real capital gains. Indexation will use the Consumer Price Index, in a similar way to the arrangements that applied between 1985 and 1999. The changes apply to CGT assets held for at least 12 months.

The reforms only apply to gains that accrue after 1 July 2027. A property held across that date will have its gain split, with the earlier part treated under the old rules. The exact apportionment method is part of Treasury's tranche 2 consultation.

Companies are in a different position. The ATO states plainly that companies cannot use the CGT discount, and companies are not named in the Budget's description of the new CGT rules. For many years, one argument against holding growth property in a company was that it gave up the 50% discount. Now that individuals and trusts are moving to indexation with a 30% minimum, that comparison has changed, although companies also bring the costs of getting profits out to shareholders.

Discretionary Trusts: The Proposed Minimum Tax

Family or discretionary trusts are among the most common property structures, partly because the trustee can distribute income to beneficiaries on lower tax rates. The Budget announced a 30% minimum tax on discretionary trusts, applied at the trustee level, from 1 July 2028.

As at the ATO page last updated on 3 September 2026, this measure is not yet law. As announced, beneficiaries other than corporate beneficiaries will receive non-refundable credits for the tax paid by the trustee. Fixed trusts are excluded, as is primary production income and income from assets of discretionary testamentary trusts existing at the time of the announcement.

The government has also announced rollover relief for three years from 1 July 2027, to help small businesses and others restructure out of a discretionary trust into arrangements such as a company or a fixed trust. The rollover relief is federal. State stamp duty on moving property between entities is a separate question for your solicitor.

Companies: Tax Rates, Passive Income and Getting Money Out

The ATO lists two company tax rates for 2025-26: 25% for base rate entities and 30% for other companies. A company is a base rate entity only if its aggregated turnover is below $50 million and no more than 80% of its assessable income is base rate entity passive income.

The ATO includes rent in its list of base rate entity passive income. A company whose income is mostly rent is therefore likely to fail the passive income test and pay the 30% rate. How short-term rental income is classified for this test depends on the facts, so ask your accountant rather than assuming.

Getting money out of a company is the second half of the picture. Profits are usually paid to shareholders as dividends and taxed again in their hands, with franking credits for company tax already paid. Informal withdrawals carry their own risk. The ATO explains that under Division 7A, a payment or other benefit from a private company to a shareholder or their associate can be treated as a dividend for tax purposes even if it is described as a loan, advance or gift.

Land Tax: Why Your State Matters as Much as Your Structure

Land tax is a state tax, and each state sets its own thresholds, rates, surcharges and rules for companies and trusts. The same structure can be efficient in one state and expensive in another.

New South Wales shows how much this matters. Revenue NSW lists a 2026 general threshold of $1,075,000, with land tax of $100 plus 1.6% of the land value above that threshold, and a premium threshold of $6,571,000. It also states that the tax-free threshold does not apply to land owned as part of special or discretionary trusts. For a modest NSW investment property, that single rule can decide whether a discretionary trust is sensible at all.

Other states treat trusts, related companies and absentee owners differently, and some apply surcharges. Separate entities do not automatically mean separate thresholds, because states can group related companies. If you buy across state lines, get land tax advice for each state before settlement.

The related WTP article on the Triangle Effect explains how lending, land tax and accounting interact. The key point still stands: improving one side of that triangle can put pressure on another.

The Lending Side: Structure Can Help or Hurt

Lending is often the reason investors first ask about SPVs. As a portfolio grows, serviceability tightens, lender exposure limits appear and cross-collateralised loans can make each new purchase harder. The ownership structure changes how a lender sees the application, but it is only one part of the assessment.

Buying in a company or trust rarely separates you from the debt in the lender's eyes. Lenders commonly ask for personal guarantees from directors, look at the income and debts of the people behind the entity and apply their own policies to trusts and companies. Some lenders are comfortable with these structures and some are not.

For a portfolio-wide view, WTP's article on portfolio refinancing for property investors explains why the broker relationship matters across every loan, not just the next one.

Why Cash Flow Now Matters More Than Tax Losses

For decades, many Australian investors accepted a rental loss because part of it came back through their tax return. For established properties bought after 12 May 2026, that support is gone from 1 July 2027, whether the property sits in your name, a company or a trust. The investor who does best under the new rules is the one whose property pays its own way.

This is where strategy matters more than the entity. A long-term rental is a solid, legitimate investment. A well-chosen, well-run short-term rental can earn materially more from the same property, which can shrink or remove the loss that is now harder to use. It also brings more work, council rules and seasonality, which is why the setup and management need to be right.

There is also a pooling point. The new rule lets quarantined losses offset other residential property income. If short-term rental income is treated as residential property income for these rules, which you should confirm with your accountant, a profitable property and a loss-making one held by the same taxpayer may interact differently from the same two properties held in separate SPVs. That is a reason to plan structure and strategy together.

Holding a Short-Term Rental in a Structure: Extra Questions

If the property will be an Airbnb or other short-term rental, the structure question has a few more moving parts. None of them is a reason to avoid the strategy. They are items to settle before the first booking.

If the purchase is specifically an Airbnb, WTP's Airbnb buyers agent service focuses on locations, rules and numbers that suit short stays, so the structure advice you receive is based on a property that can actually perform.

Questions to Ask Your Accountant, Solicitor and Broker

Structure advice works best when each adviser knows what the others recommend, so take the same brief to all three.

WTP's resources and calculators can help you test repayments, holding costs and income first, so each conversation starts from real numbers.

This article is general information only and does not take your circumstances into account. Before acting, get advice from a licensed financial adviser, a registered tax agent, a solicitor and a licensed credit adviser or mortgage broker.

Timing: What to Do Before 2027 and 2028

The staged start dates give investors time to plan, but only if the planning starts early. A practical timeline looks like this.

Structure Does Not Replace Due Diligence

The owner's name changes tax, lending and paperwork, not the fundamentals of the asset. Before committing, you still need comparable sales, rental or nightly rate evidence, local demand, vacancy or occupancy risk, building condition, holding costs, insurance, strata issues, zoning, flood or bushfire exposure and the depth of the buyer market when you eventually sell. For a short-term rental, add council rules, strata by-laws, seasonality and realistic operating costs.

A structure can organise a good investment. It cannot turn a weak one into a strong one. WTP's guide to data-driven due diligence sets out how to test a property before you buy it.

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