Sydney’s Northwest commercial and industrial property market continues to show real resilience, with some pockets showing signs of growth persisting even as the recent Federal Budget introduced some of the most significant changes to capital gains tax and trust taxation.
From 1 July 2027, the 50% CGT discount will be replaced with an indexation-based model, alongside a 30% minimum tax on realised capital gains. From 1 July 2028, discretionary trusts will also face a 30% minimum tax on trust income. Given that a substantial share of commercial property is held through trust structures, these reforms were expected to rattle confidence in the sector. Encouragingly, that hasn’t been the case — commercial and industrial assets fall outside the negative gearing changes targeting residential property, and demand across our core markets has remained firm.
A few factors appear to be driving this resilience:
- Undersupply of quality stock. Across our key regions — the Hills District, Hawkesbury and Western Sydney/Blacktown— well-located commercial and industrial space remains genuinely scarce, keeping pressure on both pricing and leasing demand.
- A shift from residential to commercial. With residential investment settings tightening, we’re seeing a noticeable uptick in investors turning their attention to commercial and industrial assets as an alternative — and often more tax-efficient way to build their portfolios.
- Structural, not speculative, demand. Much of the current activity is being driven by genuine occupier need (logistics, trades, light industrial) rather than short-term speculation, which tends to hold up better through periods of policy change.
Of course, changes of this scale add complexity, and any trust or investment structure should be reviewed with your accountant or financial adviser in light of the new rules before making decisions. But from where we sit on the ground across Sydney’s Hills District, Hawkesbury, Western Sydney and Upper North Shore markets, the underlying fundamentals — undersupply, occupier demand, and growing investor interest — continue to support a positive outlook for commercial and industrial property.
This article is general commentary only and does not constitute financial, tax or investment advice. Please seek a qualified adviser about how these changes may affect your specific circumstances.