#45: How Property Investors Get Taxed Twice - with Davie Mach

NOTE: This episode was filmed before the 2025 Federal Budget announcement. Some of the tax changes discussed may have since been confirmed, modified, or scrapped. Please speak to your accountant for advice specific to your situation.

Episode Summary

Steve sits down with Davie Mach, founder of Box Advisory Services and one of Australia's most-followed accountants, with over 50,000 subscribers on YouTube. In a conversation that covers everything from the proposed federal tax changes to the structuring mistakes costing investors hundreds of thousands of dollars, Davie breaks down what smart investors are actually doing with their portfolios right now, and why the advice you got five years ago might be costing you today.

In this episode, Steve and Davie discuss:

• The three proposed federal tax changes on the table: reducing the CGT discount from 50% to as low as 25%, the potential removal or grandfathering of negative gearing, and the idea of applying a 30% withholding tax on trusts.
• Why Steve and Davie both believe the CGT discount change won't meaningfully shift investor behaviour, because investors will simply pivot to purchasing through companies and other structures.
• How the federal government is eyeing property sale revenue as a way to get its share of what state governments already collect through stamp duty.
• The real risk of negative gearing changes for high-income earners, and whether removing it could push demand away from premium stock and into more affordable, positively geared assets.
• Why structuring is one of the most expensive mistakes property investors make, from buying in your personal name on a high tax bracket, to setting up a company when your personal income is low, and the property is positively geared.
• The hidden land tax trap in New South Wales: buying in a family trust means no tax-free threshold, which can cost $16,000+ per year on properties with land values over $1 million, and how some investors don't find out until the state government sends a bill for multiple years at once.
• Why buying your principal place of residence in a family trust is almost always a bad idea, because the property loses its main residence CGT exemption the moment it sits inside a trust structure.
• The common loan structuring mistake is where investors put a large deposit on the investment property and carry a bigger loan on their home, flipping the tax deductibility and turning a negatively geared investment into a positively geared one unnecessarily.
• Division 7A and why business owners who draw profits from their company without treating it as a formal loan risk being taxed at 47% on top of the 25-30% company tax they've already paid.
• Bucket companies explained: how business owners can invest retained profits through a separate company at a flat 30% tax rate, and why that structure works well when your personal income is high and the goal is long-term reinvestment.
• Buying commercial property through an SMSF, including why some investors buy in their personal name first and transfer later when their super balance is large enough to fund the deposit and loan.
• The case for (and against) business owners buying their own commercial premises in an SMSF. Davie argues that if you can guarantee the tenant (your own business) will always pay rent and never negotiate, the risk profile changes completely. Steve pushes back, noting that office tenants in particular need to ask whether the property would still stack up if they weren't the tenant.
• Why minimising tax isn't always the right move. If the goal is growth and you need borrowing capacity, paying more tax now can unlock the next property. The strategy should match the stage of life, not a blanket rule.

HOSTED BY:
Steve Palise
Ph: 0403 878 497
Email: steve@paliseproperty.com

LinkedIn: https://au.linkedin.com/in/steve-palise

CONNECT WITH DAVIE MACH

LinkedIn: https://www.linkedin.com/in/davie-mach/ 

YouTube: https://www.youtube.com/@DavieMach/ 

Website: https://www.boxas.com.au/ 

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