2026 Budget: negative gearing and CGT guidance updated - FED
The helpful guidance on the 2026 Federal Budget changes, found in the Looking to the future section of the Reference materials folder on every By Lawyers matter plan, has been updated.
The update assists practitioners advising clients now on changes that take effect on 1 July 2027.
The reforms are arriving in tranches. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 has passed and received assent and contains the substantive negative gearing and CGT amendments. The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 has been released as an exposure draft for consultation, closing on 21 August 2026, and has not yet been introduced into Parliament.
Until it is enacted, some aspects of the new regime, including the definition of a new residential dwelling, remain unsettled and advice must be framed accordingly.
The updated guidance covers:
- the quarantining of negative gearing losses on residential dwellings from the 2027–28 income year, the carry forward of quarantined losses, and the 2 exceptions, being new builds and assets acquired before 7.30 pm AEST on 12 May 2026, which are tested by reference to the contract date rather than the settlement date;
- the replacement of the 50% CGT discount with cost base indexation, the new 30% minimum tax on capital gains, and the exemptions and concessions that survive;
- the deemed disposal and reacquisition on 1 July 2027, and why the timing of a relevant CGT event turns on the date the contract is entered into;
- the discretionary trust roll-over window running from 1 July 2027 to 30 June 2030; and
- practical considerations for clients and for practitioners before 1 July 2027, including file notes, scope of retainer, and referrals for specialist tax advice.
A failure-to-warn window is open for practitioners in conveyancing, family law, estates, commercial and business matters, where a client's position may be materially affected by the timing of a transaction.
For more information, see the Looking to the future section in the Reference materials folder on all By Lawyers matter plans.
SMSFs can no longer borrow to buy residential property – FED
As part of the Federal budget changes, from 10 August 2026 self managed superannuation funds (SMSF) can no longer borrow to purchase residential real property.
New s 67A(2)(c) of the Superannuation Industry (Supervision) Act 1993 restricts limited recourse borrowing arrangements to real property that is business real property as defined in s 66 of the Act.
After that date, a SMSF cannot use limited recourse borrowing arrangements to acquire residential property.
However, they can still purchase residential property with cash, and they can still borrow on a limited recourse basis to invest in commercial property and other assets.
Existing arrangements are not affected. Limited recourse borrowing arrangements already in place over residential real property, including refinancing of those arrangements, remain permissible.
Publication updates
The By Lawyers Self Managed Superannuation Fund commentary has been reviewed and revised to reflect the change:
The Fund borrowing section now sets out the new s 67A(2)(c) restriction, the business real property limitation, and the transitional arrangements.
An Alert has been added at the front of the commentary directing practitioners to the updated section.
Related borrowing content, including the assets a fund may acquire, the general investment rules, and the LRBA set-up steps, has been revised and reorganised for clarity.
The precedent To Do list and the client Fact Sheet for Limited Recourse Borrowing Arrangements on the matter plan have also been updated.
Visit the By Lawyers Self Managed Superannuation Fund guide to explore the full suit of resources available.
New precedents added to Companies guide – All states
The By Lawyers Companies guide has been updated with 6 new precedents to assist practitioners with common company formation, administration and corporate governance tasks. The new resolutions, letters and policy document include a consent of occupier, share offers and applications, share-issue and dividend resolutions, and a dividend payment policy.
The new precedents are:
- Consent of occupier for using premises as registered office;
- Letter of offer of shares to existing shareholders;
- Application for shares;
- Company resolution – Issue shares;
- Dividend payment policy; and
- Company resolution – Dividend payment.
These precedents help practitioners document key company decisions correctly and consistently, from confirming a registered office to issuing new shares and declaring dividends. Rather than drafting these documents from scratch each time, practitioners can rely on precedents that are prepared and kept current by experienced legal professionals, reducing the risk of errors or omissions that could expose a company, or its officers, to compliance issues down the track.
Using up-to-date precedents also means lawyers aren't left checking whether a document reflects the latest legislative requirements and market practice. By Lawyers monitors relevant law and practice on an ongoing basis, so firms can be confident that every resolution, letter and policy in the Companies guide is accurate and ready to use. This saves valuable drafting time, supports consistent processes across the firm, and lets practitioners focus on advising their clients rather than maintaining a precedent library themselves.
Why By Lawyers updates the precedent library
Keeping a precedent library current is a significant, ongoing undertaking, and one most firms don't have the time or resources to do in-house. By maintaining and expanding the Trusts guide, By Lawyers removes that burden from individual practices, allowing lawyers to:
- Work efficiently – access the right letter or prompt for the trust structure in front of them, rather than adapting a generic precedent or drafting from scratch.
- Practice with confidence – rely on costs disclosure and advice letters that are drafted by experienced practitioners and kept aligned with current law and practice.
- Manage practice risk – reduce the chance of error or omission when advising on less common trust structures, particularly special disability trusts, where getting the advice wrong can have real consequences for vulnerable beneficiaries.
For firms advising on hybrid, charitable, or special disability trusts, these additions mean the guidance and correspondence needed to run the matter properly is already there, ready to be tailored to the client.
Precedents and AI prompts added to Trusts guide – All states
The By Lawyers Trusts guide has been enhanced to ensure it delivers practical and up-to-date guidance and precedents for lawyers working on trusts matters. As part of this enhancement, 7 new precedents have been added including:
- Initial letter to client with costs disclosure - Hybrid trust;
- Initial letter to client with costs disclosure - Charitable trust;
- Initial letter to client with costs disclosure - Special disability trust;
- Prompt for letter to client with advice on hybrid trust deed;
- Prompt for letter to client with advice on charitable trust deed;
- Letter to client with advice on special disability trust deed; and
- Letter to client finalising the matter - Trusts.
These new precedents provide lawyers with the advice they need to give their clients on hybrid, charitable, and special disability trust structures. This gives firms ready-made, reliable resources to handle these types of matters consistently. Rather than each lawyer starting from scratch or adapting precedents built for discretionary or unit trusts, practitioners can now draw on precedents built specifically for these structures.
Why By Lawyers updates the precedent library
Keeping a precedent library current is a significant, ongoing undertaking, and one most firms don't have the time or resources to do in-house. By maintaining and expanding the Trusts guide, By Lawyers removes that burden from individual practices, allowing lawyers to:
- Work efficiently – access the right letter or prompt for the trust structure in front of them, rather than adapting a generic precedent or drafting from scratch.
- Practice with confidence – rely on costs disclosure and advice letters that are drafted by experienced practitioners and kept aligned with current law and practice.
- Manage practice risk – reduce the chance of error or omission when advising on less common trust structures, particularly special disability trusts, where getting the advice wrong can have real consequences for vulnerable beneficiaries.
For firms advising on hybrid, charitable, or special disability trusts, these additions mean the guidance and correspondence needed to run the matter properly is already there, ready to be tailored to the client.
New administrative disqualification for low-range drink driving – QLD
New ss 79H to 79J of the Transport Operations (Road Use Management) Act 1995 allow low-range drink driving to be dealt with by an infringement notice rather than in court, where the driver is eligible. Eligibility depends on the driver having no drink driving offence in the previous 5 years, holding an appropriate Queensland driver's licence, and the offence not having involved a commercial or public passenger vehicle.
An eligible driver who does not elect to go to court is automatically disqualified from holding or obtaining a Queensland driver's licence for 2 months, beginning 28 clear days after the date of the notice, and is taken to have been convicted of the offence. The disqualification does not start, or it ends immediately, if the driver elects to have the matter decided in a Magistrates Court, or if the notice is withdrawn or cancelled.
Advising on whether to pay the notice or elect to go to court is now the critical decision point for lawyers advising clients in these matters. The deemed conviction counts for penalty, alcohol ignition interlock, and licensing purposes, and driving while subject to an administrative disqualification attracts the same mandatory 2–5 year disqualification as driving while disqualified by court order.
These provisions were introduced by the Queensland Community Safety Act 2024 with effect from 31 August 2026.
See the By Lawyers Traffic Offences (QLD) guide for the details, including the eligibility requirements and practical considerations when advising clients on an election.
Conveyancing overhaul - VIC
Sale of land – Section 32 statements and deposit money
Significant changes are pending in Victorian conveyancing law and practice.
The omnibus Consumer Legislation Amendment Bill 2026 passed both houses of parliament on 26 August 2026.
Key aspects of the legislation affecting property law and conveyancing practice include:
Commencement
Commencement is as follows:
- amendments to the section 32 statement regime commence by proclamation, and no later than 1 June 2027;
- amendments dealing with the release of deposit money commence by proclamation, and no later than 1 July 2027;
- amendments to the Conveyancers Act 2006 and the licence suspension provisions of the Estate Agents Act 1980 commence on the day after assent; and
- general amendments to the Estate Agents Act 1980, including property price statements and reserve prices, commence on 1 October 2026.
Section 32 statement to be made available earlier
Section 32(1) currently requires a vendor to give a section 32 statement to a purchaser before the purchaser signs the contract. The Bill substitutes an obligation to make the statement available from the 'sale availability time'.
Make available is defined as making the statement available in electronic or hard copy format on the request of any prospective purchaser of land. The section 32 statement moves from a document given to the eventual purchaser to a document available to the market on request.
Sale availability time, as amended in the Legislative Council, means:
- for land publicly advertised for sale by auction or a fixed-date sale, the day that is 14 days before the first auction date or first fixed date;
- for land publicly advertised for sale in any other way, the day that is 14 days after the land is first publicly advertised for sale; and
- for land that is not publicly advertised, land to be sold within 14 days after it is first publicly advertised, or land to be sold on a day more than 14 days before a first auction date or first fixed date, before the purchaser signs the contract.
Fixed-date sale means a method of sale by which the vendor sets any date and time by which a prospective purchaser must make an offer to the estate agent or agent's representative.
A vendor is currently required to actively provide the s 32 statement to the purchaser. The amendments place the burden on the prospective purchaser, and their representative, to obtain the statement and read it. Where a statement is made available by link or online, it will need to be downloaded and reviewed before the contract is signed.
Written notice of changes to a section 32 statement
A vendor is required to give written notice to a purchaser of any changes to the statement made available under s 32(1) before the purchaser signs the contract. More updating may be required. Making the statement available at the start of a campaign rather than at the point of contract widens the period in which the disclosed position can change, for example, through a rates notice, an owners corporation certificate, or a planning certificate issued in the interim.
Rescission and offence provisions
Section 32K(3) currently allows a purchaser to rescind where the vendor fails to give a section 32 statement before the purchaser signs the contract. The ground for rescission now becomes a failure to make a section 32 statement available from the sale availability time. The offence in s 32L(c) is amended in the same terms.
Transitional period
Sections 30, 32, 32K and 32L as amended do not apply to a contract for the sale of land entered into within 28 days after the commencement day. The version of those sections in force immediately before commencement continue to apply.
Deposit not to be released unless provided by contract
Section 27 of the Sale of Land Act 1962, which sets out the statutory procedure for the early release of deposit money, is being repealed and replaced with s 26A. This new section provides that where a legal practitioner, conveyancer, or estate agent holds deposit money as a stakeholder under s 24, the deposit must not be released to the vendor or at their direction before settlement unless the contract includes a condition that provides for it.
Settlement is defined for this purpose as, in the case of a cash transaction, the time at which the purchaser becomes entitled to a transfer or conveyance of the land and, in the case of a terms contract, the time at which the purchaser becomes entitled to possession or to the receipt of rents and profits.
Section 25(1) is amended so that deposit money received by a vendor must be paid to a legal practitioner, conveyancer, or estate agent acting for the vendor, or into a special purpose account, unless released under s 26A.
Early release becomes a matter of contractual agreement rather than statutory entitlement. Release before settlement will depend on an express condition in the contract, and there is no equivalent of the current s 27 procedure to fall back on.
Estate agent not to retain amounts from the deposit
New s 26B provides that where an estate agent is authorised to pay deposit money to the vendor, or as the vendor directs, in accordance with s 26A, the agent must not retain out of the deposit money an amount for their commission, or for any auction expense or other amount to which the agent is or will become entitled, before settlement or rescission of the contract.
Property price statements and reserve prices
The statement of information under s 47AF of the Estate Agents Act 1980 is renamed the property price statement, and expanded to include the key features of the residential property with the vendor's reserve price expressed as a single dollar amount, not modified by words or symbols. Key features include the floor space and the total size of the land in square metres.
An estate agent or agent's representative is required to request the reserve price from the vendor in writing before the date of an auction or fixed-date sale, stating the proposed reserve price and the reasons for it. The vendor responds in writing by confirming that price, specifying another price, or requesting a further proposal. The reserve price must then be published for at least 7 days before the auction or fixed-date sale, and an auction or fixed-date sale cannot be conducted unless it has been published for that period.
Suspension of conveyancers' and estate agents' licences
A new Division 7A of Part 2 of the Conveyancers Act 2006 allows the Business Licensing Authority, where a licensee has not complied with the trust account requirements in s 84(1) or 85(1A), to give written notice that the licence will be suspended for a period of up to 12 months if the report required under s 85(1A) is not lodged by a date specified in the notice. While the licence is suspended the licensee is taken not to be licensed.
Equivalent provisions apply to estate agents under new sections 24E to 24G of the Estate Agents Act 1980, with the additional consequence that a suspended agent is ineligible to be or act as a registered agent's representative. Both sets of provisions commence on the day after royal assent.
Related amendments affecting property practice
The following provisions commence on the day after royal assent.
Owners corporations
Division 1 of Part 6 amends s 18 of the Owners Corporations Act 2006. An owners corporation is prohibited from commencing a proceeding in a court or tribunal unless authorised by special resolution, subject to 2 exceptions. An ordinary resolution is sufficient where the matter may be resolved by an order for payment of an amount, or relief, of no more than twice the total amount of the current annual fees set under s 23, and also where the order sought is non-monetary in nature. Each exception requires the court or tribunal to have jurisdiction to make an order of that nature.
VCAT applications in relation to a plan of subdivision
Part 10 amends s 34D of the Subdivision Act 1988 to expand the circumstances in which an application may be made to the Victorian Civil and Administrative Tribunal in relation to a plan of subdivision. The grounds extend to a member, or group of members, who refused consent to or did not vote on a proposed action, where more than half of the membership of the owners corporation, holding more than half of the total lot entitlement, consent to the action, and the purpose of the action is likely to bring economic or social benefits to the subdivision as a whole greater than the disadvantages to the members who did not consent.
Purchaser's right to rescind off-the-plan contract for residential apartment
A further amendment made in the Legislative Council inserts s 9AEA(3) into the Sale of Land Act 1962. The purchaser's right to rescind an off-the-plan contract for a residential apartment building does not apply where the developer is excepted from the requirement under s 137ZP(1) of the Building Act 1993 to arrange for the issue or execution of a developer bond.
Practical implications for lawyers and conveyancers
The practical consequences of the section 32 and deposit amendments include the following:
- Vendor instructions, searches, and certificates will need to be obtained before the sale campaign begins rather than before the contract is signed. A campaign cannot be advertised for auction or a fixed-date sale unless the section 32 statement can be made available 14 days before the first auction date or first fixed date. For a private sale campaign, the section 32 statement must be available from the day that is 14 days after the land is first publicly advertised, and if the land sells before that day, the statement must be available before the purchaser signs the contract.
- Disclosure needs to be monitored between the sale availability time and the contract, as written notice of any change is required before the purchaser signs.
- The file should clearly record when the statement was first made available, to who, and in what format, as this becomes the evidence for the rescission right in s 32K(3) and the offence in s 32L(c).
- Contracts and special conditions need to be reviewed. Where the parties agree to release the deposit before settlement, a condition must be included in the contract, and existing conditions drafted around the s 27 procedure will be redundant.
- Vendors relying on the deposit to fund a related purchase or to pay agent's costs need to understand from the outset that release before settlement depends on the purchaser's agreement.
- Two sets of section 32 timing rules will operate concurrently for 28 days after commencement, which affects both file management and advice given during that period.
- Failure to comply with trust account reporting obligations under s 85(1A) of the Conveyancers Act 2006 can result in a 12-month licence suspension.
- The obligation of obtaining the section 32 statement shifts to the purchaser. Where a contract refers to the statement by a link or online, the file needs to show that the statement was retrieved and reviewed before the contract was signed.
- The effect of a deposit release condition in a contract needs to be explained to the purchaser before signing.
Publication updates
The By Lawyers Victorian Conveyancing and property publications will be updated when these amendments commence, including the commentaries, retainer instructions, to-do lists, the By Lawyers Contract of Sale of Land, and the Library of special conditions.
Change to substituted service of FVROs – WA
Practitioners dealing with restraining orders in Western Australia should be aware that the procedure for the police to seek substituted service of family violence restraining orders (FVROs) has changed slightly, with effect from 1 August, 2026.
If police seek to effect substituted service of an FVRO without a court order under s 60(1A)(b) of the Restraining Orders Act 1997, they now need to make only 2 unsuccessful attempts at service before doing so, following an amendment to regulation 9B of the Restraining Orders Regulations 1997.
This is a small but practical change that makes a substituted service order easier to obtain and affects how and when an order takes effect.
The commentary in the Service and duration of orders section of the By Lawyers Restraining Order (WA) guide has been updated. It covers all the relevant and important aspects of service concerning restraining orders, including personal and postal service, oral service by order of the registrar, substituted service by court order and without one, proof of service, and the duration provisions under s 16 of the Act.