THE MAGNIFICENT07

The announced federal negative-gearing reforms are directed at residential property. From 1 July 2027, residential negative gearing is to be limited to new builds, with grandfathering for investments made before the Government’s announcement at 7:30 pm AEST on 12 May 2026.

Commercial property remains subject to the existing negative-gearing arrangements. That distinction is worth understanding, but it does not automatically make commercial property a better investment. The property, its income, costs and risks still need to stand on their own merits.

Commercial property can be the place where a business takes shape: where people work, clients are welcomed, products are stored and ideas become something tangible.

Its purpose extends beyond holding capital. The right premises can support the everyday activity of a business and give it room to grow.

For an investor, commercial property may provide rental income from a business tenant, subject to leasing demand, vacancy, expenses and the terms of the lease.

For an owner-occupier, it may provide premises for their own business, with greater control over where and how that business operates. The same property can be considered from two different perspectives, each with its own priorities.

Victoria is transitioning qualifying commercial and industrial property into the Commercial and Industrial Property Tax (CIPT) regime following eligible transactions. An annual property tax becomes payable after a 10-year transition from entry into the reform.

Subsequent qualifying transactions may receive different stamp-duty treatment, subject to the regime’s conditions. Entry dates, property use and transaction history matter. NORRIS’s specific CIPT and stamp-duty position must be independently verified for any proposed purchase.

Commercial property may be considered through different ownership structures, depending on the purchaser’s circumstances and objectives.

In appropriate circumstances, eligible business real property may be held within a self-managed superannuation fund (SMSF) and leased to a related business. Strict requirements apply, including the business-use rules, arm’s-length terms and market rent, and the fund’s sole purpose and investment strategy. Independent superannuation, taxation and legal advice is essential.

Owning the premises can offer a business greater control over its working environment and more certainty about its location over time.

It creates the opportunity to align the space with the business’s longer-term requirements, from its layout and fit-out to the identity it presents to clients. That control comes with the responsibilities and costs of property ownership, and remains subject to relevant approvals and permitted use.