Payday Super has turned a long-ignored superannuation trap into an immediate one, and Christmas function season is exactly when it bites.

It’s September, which means you’re locking in the venue, the band and the AV crew for the Christmas function. Here’s the part nobody mentions: you may owe superannuation on all three.

Section 12(8) of the Superannuation Guarantee (Administration) Act 1992 deems a person paid to perform or present music, entertainment, sport, a display or a promotional activity to be your employee for super purposes. It doesn’t matter that they hold an ABN, that they invoiced you, that it was a one-off, or that the agreement calls them an independent contractor. If you paid an individual to perform, the super is yours to pay.

It reaches further than the act on stage. The provision also captures people paid to provide services in connection with the performance: the sound technician, the lighting operator, or the AV contractor at your conference. The same wording picks up promotional models and brand ambassadors working a trade stand.

Two developments have turned this from theoretical to urgent

First, the $450 monthly earnings threshold was abolished in 2022. A single $400 booking now carries an obligation.

Second, Payday Super commenced on 1 July 2026. Superannuation is no longer a quarterly clean-up. It attaches to each payment, on a days-based deadline. Settling with the duo in cash on the night and sorting it out later is no longer viable.

Getting it wrong is expensive

Under Payday Super, the SGC itself (the shortfall, notional earnings, administrative uplift and choice loading) is tax deductible once you pay it. What isn’t deductible is the general interest charge that accrues while it sits unpaid, and the late payment penalty that follows if you ignore a Notice to Pay. And because the ATO now assesses the SGC itself rather than waiting for you to lodge, a venue that has run the same Friday night booking for years without ever structuring it properly can expect that exposure to surface on its own.

There is a legitimate answer. Where the booking is genuinely with the performer’s company or trust rather than with the individual, the deeming provision generally doesn’t apply, but the contract, the invoice and the payment records must all tell the same story.

The CGT trap in putting Mum on the title

It is one of the most common arrangements in Australian family finance, and one of the most expensive. A parent gifts a child the money to buy a house. The bank will not lend on the child’s income alone, so the parent goes on the title to get the loan approved. Everyone involved understands that the parent owns nothing. The money was a gift, the parent never lived there, never received rent and never claimed a deduction.

Twenty years later the house is sold. The Commissioner’s starting position is that the person on the title owns the property, and the parent is assessed on their share of a gain that may run well into seven figures. The main residence exemption does not help them, because it was never their home. Nobody thought about it at the time, and by the time anyone does, the tax has already accrued.

The position can usually be corrected. Where the child was in truth the beneficial owner and the parent held their legal interest on a bare trust, that trust relationship, not the certificate of title, determines who is assessed. The difficulty is proving it two decades after the event, on the strength of fading recollections, bank statements that no longer exist and a solicitor’s file that was closed years ago. And with the 50% CGT discount giving way to CPI indexation from 1 July 2027, the cost of failing to prove it is only going up.

Do it properly at the start

If a parent must go on title for finance reasons, the arrangement should be documented at the outset. A declaration of trust should be executed before, or at the same time as, the contract, recording that the parent holds their legal interest on trust for the child absolutely and takes no beneficial interest. That document should then be supported by a deliberate paper trail: who provided the deposit, who met every loan repayment, who paid the rates, the insurance and the maintenance, and who occupied the property.

The second step is to seek a private ruling from the ATO confirming the position straight away, not on sale. The Commissioner is being asked to accept a factual proposition about beneficial ownership. It is much easier to prove who really owns the property when the arrangement is first put in place and the evidence is readily available, than years later when a significant capital gains tax liability may depend on it.

Duty also has to be checked before anything is signed. A declaration of trust over land is dutiable, and whether nominal duty is available depends on the apparent purchaser or bare trust provisions in the relevant State legislation, and on executing the documents in the correct order. Get the sequence wrong and a tax problem simply becomes a duty problem.

The other version: buying a house for a relative to live in rent free

The same generosity, with worse arithmetic. A house is bought in one person’s name so that a parent or an adult child can live in it rent free. The consequences are:

• no main residence exemption, because it is not the owner’s home;
• no deduction for interest, rates, insurance or repairs, because there is no assessable rent;
• land tax may apply, because it is not the owner’s principal place of residence; and
• the entire gain on sale is assessable.

The one crumb of comfort is that those non-deductible holding costs can generally be added to the cost base as third element expenditure. That requires every receipt from settlement day onwards. Most people do not keep them, and end up paying tax on money they have actually spent.

Charging a mate’s rate does not solve the problem either. Deductions are capped at the rent actually received.

Get the tax advice before you sign

Conveyancers and family lawyers get the title right. They are not engaged to model a CGT event twenty years into the future, and they rarely see one coming. In almost every one of these matters, an hour of tax advice before the contract was signed would have been a rounding error against the tax bill that eventually followed.

And it has nothing to do with whether you claim a deduction.

If you run a business from your home, whether it’s a family day care, a consulting practice, or a hairdressing chair in the spare room, there is a fair chance you have assumed something reassuring and wrong.

The thought process usually goes like this: as long as you don’t claim any deductions for the house, you won’t pay capital gains tax when you sell it. That is not how the law works.

The main residence exemption is reduced where you would have been entitled to claim interest on a loan used to buy the home, had you borrowed. It is a hypothetical test. It does not ask what you actually claimed, or even whether you have a mortgage.

What matters is the character of the space. If part of your home has genuinely become a place of business (a dedicated room, a sign out the front, clients coming and going), the exemption is reduced whether or not you claimed. If nothing is set aside and you work at the kitchen table, occupancy costs were never deductible anyway, and the exemption survives intact.

So the deduction is not what creates the tax. Both are caused by the same underlying fact. Turning down the deduction does not save you, it just means you paid for the problem twice.

Three Ways Out

• Never set aside a specific area for the business. Cheapest, but it costs you the deductions and is not always practical.
• The small business concessions. On sale these can often reduce the taxable portion to nil, and with the fifteen-year exemption, the proceeds can go into superannuation as well.
• Estate planning. Where the dwelling is your main residence at your death and is not being used to produce income at that moment, the earlier income-producing use is disregarded entirely.

Note what that means. Options two and three let you keep every deduction along the way and still pay nothing. On the numbers, they beat prevention.

But both depend on facts you may not control. Your asset position in the year you sell, and when the sale happens. Illness, divorce or aged care arrive without warning, and neither concession is automatic. Land tax is a separate problem again.

None of this is a reason to avoid working from home. It is a reason to stop taking comfort from never having claimed.

You have twelve months. Use them.

From 1 July 2027, companies must give ASIC the director identification number of every director, through the channels you already use, being the annual review and any notification of a change to a director’s details. In practice, that means every company will have reported by 30 June 2028.

This looks like housekeeping. It is not. It is the moment ASIC’s company register gets reconciled against the director ID register, two databases that have never spoken to each other. A great deal of untidiness will surface at once, and untidiness at ASIC has a price.

Late lodgement fees currently run a little over $100 if you are up to a month late, and over $400 beyond that. They apply per form, per company. If you discover in mid-2027 that three of your companies show an old registered office, that is three late lodgements, plus whatever else turns up.

Worse is the director with no director ID at all. Failing to hold one is a strict liability offence with a penalty approaching $20,000, and ASIC can now disqualify a person from managing corporations for up to three years for failing to apply when directed. Right now nobody is systematically checking. From 1 July 2027, the system checks itself.

Correcting a record now, in your own time, costs a form and a few minutes. Correcting it in the fortnight before your 2027 annual review, when it is holding up a lodgement you are legally required to make, costs a late fee on every entity.

Why the Old Playbook No Longer Works

From 1 July 2027, the 50% CGT discount will be replaced for individuals, trusts and partnerships, by two mechanisms working together: indexation of the asset’s cost base, and a minimum 30% tax on the resulting net gain. Indexation is genuinely helpful: you are taxed only on the real, above-inflation gain. The 30% floor is where the planning landscape changes.

How the floor works

The floor sets a minimum effective rate. If your gain would otherwise be taxed above 30%, nothing changes. You pay your marginal rate. If your rate on the gain would fall below 30%, the floor tops it up to 30%. Critically, it is calculated on the gain itself, independently of the rest of your tax position. That removes a series of familiar strategies from the table:

• Realising in a low-income year no longer helps. Deferring a sale to a year when you expect a lower marginal rate will not get you below 30% on the gain.
• Large concessional super contributions no longer help. Catch-up contributions and the two-year contribution-reserving strategy can reduce your taxable income, but not the tax on the gain below 30%.
• Even substantial tax losses won’t help. Carried-forward revenue losses and other deductions can shelter your other income, but the gain itself is still taxed at a minimum of 30%.

There is one important exception. People receiving means-tested income support, such as the Age Pension or JobSeeker, are exempt from the floor in any year they receive a payment. For them, the familiar strategies still work: realising in a low-income year, making deductible super contributions and applying tax losses can each reduce the tax on a gain, exactly as they do today.

Two things to keep in perspective

First, the 30% applies to the net gain, not the headline figure. Indexation lifts your cost base, and capital losses still reduce the gain before the floor applies, so the base it bites on is smaller than the raw profit.

Second, the new regime applies to assets you already own. Growth accruing up to 1 July 2027 keeps the existing 50% discount under the transitional rules, but all growth from 1 July 2027 onwards, even on long-held assets, is caught.

The real levers now are indexation, capital losses and the timing of a sale relative to 1 July 2027, not the income-shifting strategies that used to work.

If you are holding assets with significant unrealised gains, now is the time to review your position. The planning window matters. Speak to us well before you decide to sell.

The headlines say negative gearing is “gone.” For most investors, that is not what the new law does.

The Tax Reform No. 1 Bill 2026 passed both houses of Parliament on 25 June 2026 and received Royal Assent on 26 June 2026. It is now law, though the negative gearing changes do not take effect until the 2027–28 income year, so nothing changes in the meantime.

What is actually changing

Negative gearing lets an investor whose property costs, including loan interest, rates, repairs, management fees, etc., exceed the rent deduct that net loss against their other income, such as salary, reducing their overall tax.

From the 2027–28 income year, that ability is wound back for established residential investment properties, but only for properties purchased after 7:30pm on 12 May 2026 (Budget night). For those properties, a net rental loss can no longer be deducted against salary or other non-property income. The loss is not lost: it is quarantined, carried forward, and can be applied against residential property income — other rental income, or the capital gain when you eventually sell a residential property.

Who is protected

Two important groups are unaffected:

• Properties you already held at Budget night. Anything you owned, or had under contract, at 7:30pm on 12 May 2026 is fully grandfathered. You can keep negatively gearing it against your other income in the ordinary way for as long as you hold it.
• New builds. Eligible new-build residential property retains full negative gearing — and, as it happens, the more favourable capital gains treatment when sold. The policy is deliberately steering investment toward new housing supply.

What is not affected at all

The change is confined to residential property. Commercial property, shares and other investments are untouched and continue to be negatively geared as they are today. Superannuation funds, including SMSFs, and widely held trusts are also excluded from the new rules.

Where this leaves you

If you already own an investment property bought before Budget night, you don’t need to do anything. Your position is unchanged.

If you are thinking about buying an established residential property from here on, the tax calculus has shifted. From 2027–28 you won’t be able to use a rental shortfall to reduce the tax on your salary, so cash flow and yield matter more than they used to. A new build keeps the existing treatment; and if you are weighing residential against commercial, commercial property is now relatively more attractive on this measure.

This article covers negative gearing only. The same Act also changes the CGT discount, covered in our separate article on the new 30% minimum tax, along with several other measures we will address in future editions.

None of this is a reason to rush a purchase or a sale. The better move is to map out how the changes affect your particular holdings and plans before you commit.

Why You Might Owe More Tax Than You Think

If you worked more than one job this year, there is a fair chance your tax return won’t land quite the way you expect, and we’d rather warn you now than surprise you at the end.

Every Australian gets one tax-free threshold: the first $18,200 you earn each year, on which no tax is payable. When you start a job, your employer asks whether you’d like to claim it. The problem begins when you answer ‘yes’ to two employers at the same time.

Each employer then withholds tax as though they’re the only one paying you, effectively applying the tax-free threshold twice. Your take-home pay looks healthy through the year. But you’re only entitled to that $18,200 once. When we add both incomes together at year end, the tax actually owed is higher than the amount withheld, and that gap becomes a bill.

This catches people out even when the jobs don’t overlap. A common example: you finish one job, receive a holiday pay payout, then start somewhere new straight away. For a short window, both employers are applying the threshold, giving you two tax-free thresholds for the same period.

There is a second trap. Your second wage stacks on top of your first, which can push that income into a higher tax bracket than either employer accounted for. Again, not enough tax comes out along the way.

The fix is simple going forward: if you’re juggling two jobs, claim the tax-free threshold on only one (ideally the higher-paying role), and let the second withhold at the full rate. Each pay may be a little lighter, but you’re far less likely to face a surprise bill at tax time.

From 10 August 2026, super funds can no longer borrow to buy a home or unit as an investment. If you already have a loan, you are protected. If you are mid-purchase, the key date is simpler than you might think, but you need to act now.

If you have been thinking about buying an investment property inside your self-managed super fund (SMSF) using borrowed money, there is an important change coming. If you are already partway through a purchase, you may need to move quickly.

From 10 August 2026, an SMSF will no longer be able to borrow to buy residential property. Two pieces of good news upfront: if your fund already has a property loan, nothing changes for you; and if you are mid-purchase, what matters is the day you sign the contract, not the day settlement occurs.

What is changing

For years, SMSFs have been able to borrow to buy property through a limited recourse borrowing arrangement. A recent change to the law closes that door for residential property. From 10 August 2026, your fund can only borrow to buy property used in a business. Sites like commercial premises, a shop, an office or a factory. Borrowing to buy a house or unit to rent out will no longer be permitted.

If you are mid-purchase: the deadline that matters

The question we hear most often is: what is the actual cut-off? The contract date or the settlement date? It is the contract date. If you sign (exchange) contracts before 10 August 2026, your purchase is protected, even if settlement happens weeks or months later. That means an off-the-plan purchase that won’t be finished for a year is still fine, provided contracts are signed before the deadline.

You do not need your loan approved yet

You do not need your loan fully approved by 10 August. A contract that is ‘subject to finance’ still counts. A signed contract is a signed contract, even with a finance condition attached. Your loan can be approved and the money drawn down after the deadline. The thing that must happen before 10 August is signing the purchase contract.

One to watch: brand-new property from a developer

There is one technical question still unresolved. There is an argument that a brand-new property bought directly from a developer might, in narrow circumstances, still qualify for SMSF borrowing, because at the point of purchase it is the developer’s business stock. Do not count on this. It is untested, runs against the clear intent of the change, and may be shut down by the tax office or further legislation. We are watching it closely and will update you if the position becomes clearer. For now, treat it as a possibility, not a plan.

If you are considering buying property inside your SMSF, or you are already mid-purchase, please contact us before you sign anything. Time is short, the structure needs to be right before contracts are exchanged, and lender capacity may tighten quickly.

Don’t Let the Tax Tail Wag the Investment Dog

What is Changing with Negative Gearing

From 1 July 2027, negative gearing on residential investment properties will be limited to new builds. Investors who purchased an established property before 7:30pm AEST on 12 May 2026 retain their existing arrangements until they sell. Anyone buying an established residential property after that date will no longer be able to offset rental losses against their broader income. Losses will be quarantined and can only be applied against future residential property income.

Alongside this, the 50% capital gains tax (CGT) discount will be replaced by inflation-adjusted indexation from 1 July 2027 for most assets, with new builds offered a choice between the old and new arrangements. In short: new properties get the tax benefits. Established properties purchased after 12 May 2026 do not.

The Tax Benefit is Real, but so is the Growth Gap

New properties typically carry a price premium over comparable established homes and tend to grow in value more slowly. You are buying at the top of the construction cost curve with no land value appreciation built in yet, and new estates often lack the scarcity and established amenity that drives long-term growth in established suburbs.

Historically, established properties in quality locations have consistently outperformed new builds in capital growth by approximately 1% per year. Consider an $800,000 purchase: an established property growing at 6% per annum reaches approximately $2.57 million after 20 years; a new build at 5% reaches approximately $2.12 million, a difference of more than $445,000 on the same starting price. Compare that to the tax benefit: at a top marginal rate of 45%, negatively gearing $15,000 per year saves around $6,750 in tax annually, roughly $33,750 over five years. Meaningful, but a fraction of the long-term growth difference.

What Investors Should Actually be Asking

The question is not ‘which property gives me the tax benefit?’ The question is: ‘which property will build the most wealth?’ That means focusing on fundamentals: location scarcity, proximity to employment, infrastructure investment, rental demand, and the quality of the land component relative to the building. A new apartment in an oversupplied precinct with negative gearing is still a weaker investment than a well-located established property without it.

If the loss of negative gearing on an established property creates genuine serviceability pressure, that is a real constraint worth planning around. But if the numbers work without the deduction, the long-term growth case for quality established property remains compelling. Tax rules change. Good locations do not.

Property investment decisions are best made on the fundamentals, and with the negative gearing rules changing from 1 July 2027, it is worth reviewing your strategy sooner rather than later.

How the Budget’s New Trust Tax Affects Your Will

What the Government Has Announced

The 2026 Budget proposes a 30% minimum tax on the taxable income of discretionary trusts, to take effect from 1 July 2028. This includes testamentary discretionary trusts created through a will. Under the current rules, trust income flows through to beneficiaries and is taxed at their individual marginal rates. The proposed change would require the trustee to pay at least 30% tax before any distribution is made.

The proposal draws a clear distinction: discretionary testamentary trusts already in existence at Budget night (12 May 2026) are expected to be excluded; those established after Budget night will be subject to the 30% minimum tax; and fixed testamentary trusts are explicitly excluded altogether. No legislation has been introduced to Parliament yet. The design is subject to consultation and may change.

Why Your Will Needs to Be Built for Flexibility

The instinctive reaction may be to simply make your will create a fixed trust instead of a discretionary one and avoid the tax entirely. The problem is that this trades a potential future tax cost for a very real and immediate loss of protection. The primary purpose of a discretionary testamentary trust has always been asset protection, not tax minimisation.

A discretionary trust gives the trustee the power to determine each year who among a class of beneficiaries receives income and capital. No beneficiary holds a fixed, attachable interest in the trust assets, making it far harder for creditors, a separating spouse, or a litigation claimant to reach the estate’s wealth. A fixed trust, by contrast, locks in each beneficiary’s entitlement, and that fixed interest can, in many circumstances, be reached by creditors or considered in family law proceedings.

The Solution: A Will That Decides Later

A well-constructed will can give the executor the power to establish either a discretionary or a fixed testamentary trust (or a combination of both) based on the law and circumstances that exist at the time of death. If the 30% tax passes, the executor can assess whether a fixed trust better serves a beneficiary’s needs. If the law changes or is defeated, the full discretionary trust option remains available.

Those who do not yet have a will, or whose will does not include testamentary trust provisions, are in a more urgent position. A will drafted now with a flexible executor power preserves all options, protects beneficiaries in the interim, and can be refined once the legislation is settled.

If you have a will that includes testamentary trust provisions, or if you do not yet have a will, now is a good time to review your estate plan in light of the proposed changes.