Regional farming families, business owners and property investors are seeking financial advice following federal budget tax changes expected to reshape investment and business planning across Australia.

Changes to negative gearing, capital gains tax and discretionary trusts announced in the Federal Budget have triggered strong interest from regional clients trying to understand how the reforms may affect future investment, succession planning and business structures.

Emma Duffey from FTS Financial Services said confusion had been one of the strongest reactions among clients since budget night.

“We were bewildered too,” Ms Duffey said.

“It took a sometime to work through it because the changes are so significant and every client situation is different.”

Under the proposed reforms, negative gearing tax benefits for future residential property investments would be limited to newly built homes from July 1, 2027, while the current 50 per cent capital gains tax discount would be replaced with a CPI indexation model and a minimum 30 per cent tax rate applied to future capital gains.

Changes to discretionary trusts are also expected to affect many regional farming families and businesses operating under existing trust structures.

“There are a lot of family farms and businesses operating through trust structures,” Ms Duffey said.

“There will likely need to be a lot of restructuring to make sure people are positioned correctly moving forward.”

She said the changes extended well beyond property investors.

“Many businesses run through trusts as well, not just farms,” she said.

“A lot of people will now need to sit down with accountants and financial advisers and work through what structure is best for them.”

The Federal Government has defended the reforms as a way to redirect tax incentives toward increasing housing supply, with tax advantages for new housing construction remaining under the proposed system.

Ms Duffey said the changes could encourage construction activity in regional areas but warned high building costs remained a major barrier.

“If people build new properties there will be tax advantages there,” Ms Duffey said.

“But building costs are already extremely high.”

She said rising costs across construction, fuel and interest rates were already placing pressure on regional communities before the budget changes were announced.

Ms Duffey said widespread online discussion surrounding the reforms had added to uncertainty, particularly around negative gearing and capital gains tax changes.

“A lot of people think negative gearing has simply disappeared, but there are still many details people need to properly understand,” she said.

“Every person’s situation is different.”

She said existing negatively geared properties would largely continue under current arrangements, while future investment decisions may increasingly favour new housing construction over established homes.

Despite growing concern, Ms Duffey urged people not to make rushed decisions.

“Nothing changes today,” she said.

“There is time to review structures properly and seek professional advice.”

She said the next 12 months were likely to involve significant planning and restructuring for many regional families and business owners.

“The biggest thing at the moment is confusion,” she said.

“Everyone is trying to work out how these changes affect them individually.”

(This article is general reporting only and is not financial advice)