While much of the public discourse has centered on the tightening of residential negative gearing, the combination of looming Capital Gains Tax reforms and a new 30 per cent minimum tax on discretionary trusts has created a ‘now or never’ environment for investors. In the Central West, specifically within the high-growth corridors of Orange, Bathurst, and Dubbo, this transition is already manifesting in record-breaking transaction speeds.
With the Budget effectively isolating negative gearing to new residential builds from 1 July 2027, the comparative appeal of commercial property has never been stronger. Unlike residential, commercial property retains full deductibility of losses against other income, which is a critical factor for portfolio optimisation. Scott Timbrell, managing director of RWC Central West, notes that this tax disparity is driving a new wave of interest into the region.
"For the private investor who has historically used residential property as a wealth-building vehicle, the math has fundamentally changed," Mr Timbrell said.
"Commercial property in the Central West offers higher yields and full deductibility, and in that narrow sense, these regional assets have become significantly more attractive than established residential holdings in the city."
The theory of a pivot to commercial property is being backed by data from the Orange market. In the last three weeks, RWC Central West finalised two high profile sales that underscore the depth of liquidity currently sitting on the sidelines. Both properties were secured in just 21 days.
The property at 51 Kite Street, a blue-chip medical and dental asset, sold for $1,355,000 on a 5.3 per cent yield. Meanwhile, 201 and 203 Summer Street, a value-add regional play, sold for $1,100,000 at a 7.45 per cent yield. The Summer Street transaction was particularly notable as it featured a 10-day settlement to a cash buyer.
"The local market knows these buildings well, but few expected them to move this fast at these price points," Mr Timbrell said.
"The speed of these transactions reflects a clear safe haven play where investors are willing to accept tighter yields for recession-proof certainty. Simultaneously, the 10-day cash settlement on Summer Street proves that liquidity in Orange is immense. Our strategy is simple: we don't wait for the market to tell us what a property is worth. We use our database to create competition, drive the price, and settle quickly."
The Budget confirmed that from 1 July 2027, the 50 per cent Capital Gains Tax discount will be replaced with cost base indexation and a 30 per cent minimum tax on net gains. Furthermore, from 1 July 2028, a 30 per cent minimum tax on discretionary trusts will take effect.
These deadlines are serving as a catalyst for immediate market activity. Existing owners are looking to crystallise gains under the current regime, while buyers are rushing to deploy capital before the trust reforms permanently alter after-tax returns.
Adding to the regional investment case, is the Federal Government’s $2 billion dollar infrastructure commitment, which includes $500 million dollars dedicated specifically to regional Australia. This funding aims to unlock housing supply by building the critical infrastructure such as roads, sewerage, and power required for expansion.
Mr Timbrell noted that infrastructure is the lifeblood of commercial value in the Central West. "When the government invests in regional connectivity, it creates a value floor for industrial and retail assets," he said.
"Projects that support new housing in the region naturally increase the demand for commercial services, creating a fundamental growth story that transcends temporary tax changes."
As the market enters this period of fiscal transition, RWC Central West is advising clients to move away from a wait and see approach. "If you've been told to wait and see, you’re missing out on the strongest pool of cash buyers I’ve seen in years."
The current strategy focuses on identifying these high-net-worth pivots early and using the current 12 to 18 month window to maximise results before the 2027 tax cliff.
