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Budget tax changes reshape investment priorities for advisers and investors

Stropro

FOR IMMEDIATE RELEASE

Budget tax changes reshape investment priorities for advisers and investors, says Stropro

Sydney, 13 May 2026: The 2026 Federal Budget will force advisers and investors to rethink the role of tax, leverage and income in portfolio construction, according to Australian structured investment platform Stropro.

Following the Budget’s proposed changes to negative gearing, capital gains tax and discretionary trust taxation, Stropro says structured products are likely to become more relevant as advisers look for strategies that can provide defined income, downside protection, equity exposure and tax-aware outcomes.

Stropro COO and co-founder Ben Streater said the Budget does not reduce the need for structured products, but it changes which products advisers should prioritise.

“The Budget changes the structured products playbook,” Mr Streater said.

“Protected Equity Lending is the time-sensitive opportunity, defined income structured products are the quiet achiever, and growth-focused structures will need a sharper after-tax investment case.”

Under the Budget measures, negative gearing on property will be restricted to new builds from 1 July 2027, while the 50% capital gains tax discount will be replaced with indexation across assets from the same date, subject to a minimum 30% tax on real gains. A 30% minimum tax on discretionary trust income will also apply from 1 July 2028.

Mr Streater said the changes would likely push advisers to reassess traditional property-led tax strategies.

“For years, many investors have relied on property, leverage and discounted capital gains as part of their wealth creation strategy,” he said.

“When property gearing becomes less powerful and capital gains become less tax-advantaged, investors will naturally look harder at alternatives that can provide clearer outcomes.”

Stropro says Protected Equity Lending, or PEL, is likely to be one of the clearest short-term beneficiaries of the Budget changes.

PEL strategies can provide leveraged equity exposure, downside protection and potential upfront interest deductibility under Australia’s capital protected borrowing rules. For eligible investors, PELs maturing before 1 July 2027 should also still qualify for the existing 50% CGT discount on capital gains, provided the investment has been held for at least 12 months.

“For investors who were already considering a PEL, the Budget has created genuine urgency,” Mr Streater said.

“This is the final window where investors can combine upfront deductibility, leveraged equity exposure, capital protection and access to the existing CGT discount in one structure.”

Mr Streater said the longer-term implications could also be significant.

“Once the new CGT regime applies, many high-net-worth investors may become more reluctant to sell growth assets and crystallise taxable gains,” he said.

“The preferred playbook may become to hold quality assets for longer, build equity over time, and borrow against the portfolio when liquidity is needed. That could make protected equity lending and portfolio finance more relevant, not less.”

Stropro also expects defined income structured products to receive greater attention from advisers.

“In a world where future capital gains are less tax-advantaged, income that is earned and paid along the way becomes more valuable,” Mr Streater said.

“Defined income products do not rely on the 50% CGT discount to make sense. A coupon that has been paid is banked. It is not dependent on a future sale price, the preservation of a CGT concession, or a future capital gain.”

Stropro said growth-focused structured products, including enhanced growth notes, participation notes and discount-entry notes, remain relevant but will need to be judged more heavily on payoff design rather than tax efficiency.

“Growth products are not uniquely disadvantaged,” Mr Streater said.

“They sit broadly within the same post-Budget CGT framework as other growth assets. The difference is that structured products can shape the payoff through features such as protection, discount entry, participation rates, caps, barriers and defined terms.”

Stropro said the broader message for advisers is that after-tax portfolio construction will become more important, not less.

“The old playbook was built around property, leverage and discounted capital gains,” Mr Streater said.

“The new playbook is likely to put more focus on income, protection, equity exposure and after-tax outcomes.”

ENDS

About us:

Stropro empowers wealth advisers with institutional-grade access to structured investment solutions, a capability traditionally reserved for private banks.

Its wealth management solution provides financial infrastructure, product access, tools and integrations to enable advisers to deliver more personalised, outcome-based portfolios to high-net-worth clients.

Stropro works with financial advisers, wholesale investors, sophisticated investors and professional investors only.

Contact details:

Ben Streater, COO/Co-Founder