Mortgage brokers can expect an influx of questions from clients about commercial lending very soon.
Recent Federal Budget changes to residential investment rules have many borrowers looking at commercial property assets for the first time. This foray into unfamiliar territory is an opportunity for brokers to guide the conversation and help clients understand what commercial finance can offer.
In this article:
- What are the policy changes sparking a shift in the property investment conversation? The new rules around negative gearing, capital gains tax concessions and borrowing through SMSFs that will impact your clients.
- How has commercial property been impacted? Under the recent changes, commercial property is expected to become an appealing investment option.
- When to talk about commercial property with your clients. Commercial lending conversations are becoming a normal part of everyday broker life.
Which Federal Budget reforms impact property investment?
There are three key Federal Budget reforms changing the rules for property investors.
| The rule | The change |
| Negative gearing | If an investor buys an established investment property, they can no longer use rental losses to reduce their salary or other income. Does not apply to new build residential property, or properties held before the May 2026 announcement. |
| Capital gains tax | Replace the current 50% capital gains tax discount for individuals, trusts and partnerships with cost base indexation and a 30% minimum tax rate on capital gains. Only applies to gains accrued from 1 July 2027. |
| Limited Recourse Borrowing Arrangements (LRBAs) in SMSFs | Limited Recourse Borrowing Arrangements (LRBAs) cannot be used to purchase residential investment properties from 10 August 2026. Existing residential LRBAs will be grandfathered. |
How has commercial property been impacted?
Commercial property remains largely unchanged after the recent Federal Budget.
- Negative gearing may still apply to commercial property loans, allowing investors to offset rental losses against their taxable income. Tax treatment on commercial properties depends on the borrower’s structure, purpose and circumstances.
- LRBAs may still be used by an SMSF to purchase commercial property, which helps to protect the fund’s other assets from lender recourse if the loan defaults.
For investors, these are two very big ticks in the ‘pros’ column. While it doesn’t mean that everyone should invest in commercial property, it does mean that demand for commercial loans is likely to rise within your client base.
Questions your clients might have about commercial loans
Once your clients understand the new shape of the property investment landscape, more questions will follow. This time, they’ll be more interested in the practicalities of commercial property investment, and how they can make it work for their own financial goals.
Here are some conversation starter questions you may get from your clients.
Question 1: What types of commercial property can you buy?
Short answer: Commercial finance can be used to buy a range of commercial properties such as offices, retail space, warehouses, and more.
Why it matters: This can help brokers explain a variety of properties that may fall within commercial lending, subject to the borrower’s circumstances, loan purpose and lender criteria.
Question 2: Can you refinance a commercial property?
Short answer: Yes. Clients may refinance to improve cash flow, release equity or better align their lending with their current business or investment needs.
Why it matters: A refinance conversation can identify whether an existing facility remains suitable for the client’s current circumstances and uncover opportunities to add value.
Question 3: Can you release equity from a commercial property?
Short answer: Yes. Equity may be used to support business growth, invest in another property or undertake commercial renovations.
Why it matters: This gives brokers an opportunity to discuss how existing commercial property assets may support future business or investment plans.
Question 4: Can a business buy its own commercial premises?
Short answer: Yes. A business may be able to purchase its own premises, depending on its structure, cash flow, deposit, loan purpose and borrowing capacity.
Why it matters: For some business owners, purchasing premises may be relevant to longer-term planning, including equity building, occupancy stability and reduced reliance on leasing.
Question 5: Can self-employed borrowers access commercial finance?
Short answer: Yes. Eligible borrowers may include sole traders, partnerships, companies and trusts.
Why it matters: This helps brokers discuss commercial finance options with a broader range of self-employed clients.
When should a broker discuss commercial lending with a client?
Commercial lending conversations often begin when a client’s circumstances change. Buying a business, expanding into larger premises, refinancing, releasing equity or reviewing future investment plans are all opportunities to discuss how commercial finance could support their goals.
Many of these opportunities can come from your existing book of residential clients. The standard, everyday conversations you have with clients can seamlessly lead into discussions about commercial lending. Think of it as a natural extension of the conversations that brokers are already having.
The key takeaway
Commercial lending is becoming more relevant with borrowers across the industry. By raising the topic early and understanding the opportunities available, brokers can support their clients through every stage of their commercial lending journey.
Having the right team behind you can make leading commercial lending conversations easier. At MA Money, our BDMs work alongside you from application to settlement, providing practical guidance and helping you navigate complex scenarios so you can find the right fit for your commercial clients.
Learn more about MA Money’s commercial lending solutions here or contact a BDM.
Information for broker use only. This article does not constitute financial, tax or legal advice and does not take into account personal objectives, financial situation or needs. You should seek independent advice from a licensed professional before making any financial decisions. Applications for credit are subject to eligibility and lending criteria. Fees, charges, T&Cs apply (available on request).
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