HAMILTON DAVIS

Will the New Tax Rules Shift Investors Towards Commercial Property?

The recent changes to Australia’s capital gains tax regime may prove to be one of the most significant structural shifts in property investment for decades.

The numbers are compelling.

With inflation indexation replacing the 50% CGT discount, assets delivering lower capital growth but stronger income become relatively more tax-efficient. Historically, that has been commercial property.

The tipping point appears to be around 4.5% annual capital growth. Below that level, the new tax treatment generally favours commercial assets. Above it, residential property has historically held the advantage.

At the same time, commercial property continues to retain the benefits of negative gearing, while those concessions have been substantially reduced for many future residential investors.

This isn’t simply a tax story.

It has the potential to redirect private capital towards industrial property, neighbourhood retail, medical centres and quality office assets—particularly those offering secure income and long-term leases.

For Queensland, where population growth continues to support demand for commercial space, this could provide another tailwind for the sector.

Our view?

Tax policy doesn’t create great investments, but it does influence where capital flows.

Investors who have traditionally focused on residential property may now have a compelling reason to reconsider commercial real estate as part of a diversified portfolio.

Hamilton Davis

Hamilton Davis | Queensland Property Month in Review – June 2026

Queensland’s property market continues to demonstrate resilience.

• Brisbane dwelling values have now increased by around 8% over the past 12 months, continuing to outperform many capital cities.

• Rental vacancy across South East Queensland remains below 1% in many locations, underpinning investor demand.

• Population growth continues to support housing demand, with Queensland remaining one of Australia’s strongest interstate migration destinations.

• Quality, well-located homes continue to attract strong competition, while buyers are becoming increasingly selective on secondary stock.

Our view: The fundamentals remain firmly in Queensland’s favour. Limited supply, ongoing population growth and disciplined lending conditions continue to support long-term values. As always, location and quality remain the key differentiators.

Hamilton Davis – Property Intelligence.

As the Federal Budget approaches, housing policy needs a reset — not more short-term fixes.

Australia’s affordability challenge is not being driven by a lack of demand stimulus. It is being driven by a structural inability to deliver housing at scale.

Yet policy continues to lean in the wrong direction — stimulating demand and redistributing existing housing stock, rather than addressing the constraints limiting supply.

In a supply-constrained market, these interventions are not neutral. They risk pushing prices higher, tightening rental conditions, and worsening overall affordability.

The priorities should be clear:

• Protect rental supply — The system relies on private investors, and there is no immediate substitute if that supply exits.
• Improve housing mobility — Tax settings continue to discourage downsizing and efficient use of existing stock.
• Avoid demand-side inflation — Incentives in constrained markets are capitalised directly into higher prices.
• Support construction capacity — Delivery, not approvals, is now the binding constraint.

The common thread is simple:
Housing outcomes are being dictated by supply limitations.

Until policy focuses on expanding capacity and improving delivery, affordability will remain out of reach.-