The recent federal budget has ruffled a lot of feathers here in Australia, and justifiably so. I've seen the data and the modelling, and none of it has made sense to me. But beyond the politics, what this budget has done is fundamentally shift the investment landscape for everyday Australians. And that shift is creating a conversation that I think is long overdue.

My personal view is that I've never been less interested in property as an investment and never been more interested in the alternatives. Particularly gold, silver, and platinum. This budget, for all its problems, may actually be the catalyst that finally gets Australians looking in the right direction.

What Actually Changed

There are two big changes in this budget that every Australian investor needs to understand.

The first is capital gains tax. Previously, if you held an asset for longer than one year, you received a 50% discount on your capital gains. That incentivised long-term investing and made the maths relatively straightforward. That's gone now. The new system ties your discount to the inflation rate over the period of the investment, which makes it significantly harder to calculate and, at the end of the day, means most investors will be paying more tax. Full stop.

The second change is the one I don't think enough people in my space are talking about: the removal of negative gearing. For those unfamiliar, negative gearing was essentially the government paying you to lose money on your investment property. It sounds absurd when you say it like that, because it is. But it was the single biggest driver of Australia's property investment culture for decades. It incentivised people to take on enormous debt across multiple properties purely to reduce their taxable income. The raw numbers often didn't stack up, but the tax benefit papered over the cracks.

That paper is gone now. I was on the phone to a mate recently whose father owns investment properties in Queensland. Because of the removal of negative gearing, his cash flow has been hit hard enough that he's considering selling one just to stay solvent. And the changes don't even kick in until July 1 next year.

The Property Market Is Already Feeling It

You don't have to wait for July to see the impact. The market is already moving.

Sydney's auction clearance rates have dropped to their lowest levels since April 2020, the early days of the pandemic. Preliminary data puts the clearance rate at 49.2%. SQM Research recorded an even sharper figure of just 31.1%. That is an extraordinarily weak market by any measure.

Three things are converging at once. The budget tax reforms have caused investors to pull back sharply, cooling activity across the board. Consecutive RBA rate hikes have pushed the official cash rate to 4.35%, shrinking borrowing capacity and pushing consumer sentiment on home buying to 18-month lows. And sticky inflation combined with elevated living costs has compounded affordability issues to the point where buyers are either becoming highly selective or stepping back from bidding altogether.

Here is the important part. Auction clearance rates are a leading indicator of where property values are heading. Historically, when clearance rates sit below 60%, analysts forecast continued downward pressure on dwelling values. We are well below that threshold right now, and the biggest policy changes haven't even come into effect yet.

Investment Dollars Are Looking for a New Home

With property losing its government-subsidised advantage, capital has to go somewhere. That is not a theory. That is just how markets work.

I've been making the case for gold and silver for years. For most of that time, I was pushing uphill because Australians were being actively paid by the government to buy property instead. That argument just became a lot harder to make on the property side. The playing field has levelled.

Here is something worth understanding clearly. The capital gains tax changes apply equally to property, shares, and precious metals. It's an even playing field across all three asset classes. But property still comes with stamp duty, land tax, and a range of other costs on both the buy and sell side. Precious metals carry none of those. No stamp duty. No land tax. No GST. The comparison, on a pure cost basis, has never looked better for gold and silver.

The SMSF Angle Nobody Is Talking About

This is the part of the conversation that I think is flying completely under the radar.

If you're buying precious metals in your personal name, yes, you're subject to whatever new CGT rules apply. But inside a self-managed super fund, the picture looks very different. Hold a precious metals asset for over a year inside your SMSF and your CGT rate can be as low as 10%. If you're in retirement phase, that rate drops to 0%.

A self-managed super fund costs around $3,000 to set up. For an asset class with no stamp duty, no land tax, and no GST, combined with a CGT rate that can reach zero in retirement, the numbers stack up in a way that most Australians simply haven't considered yet. The tax benefits for precious metals investors buying through an SMSF are now stronger than they have ever been.

I think I should mention here that we are not financially incentivised to promote SMSFs or any business or person providing services related to SMSFs. The reason I highlight it is that I see value in Australians considering an SMSF to protect their wealth.

The Social Reality of This Budget

I want to be honest about something beyond the investment mechanics, because I think it matters.

Negative gearing was always a distortion. It incentivised excessive debt, inflated property prices, and priced younger Australians out of the market entirely. The downstream effects are real and measurable: falling family formation rates, falling birth rates, a generation locked out of wealth building before they even got started.

But here is where this budget also stings. The Australians who are being hit hardest by these changes are the ambitious ones. The ones who haven't built their wealth yet. The ones who couldn't benefit from the tax environment of the last two decades and are now being asked to build wealth at higher tax rates than the generation before them ever faced. The ladder is being pulled up.

I have nine employees. I pay over a million dollars a year in tax across my income and my business. And this budget feels like a direct penalty on productivity and ambition. Hardworking Australians are being treated like an ATM by a government that keeps asking for more and delivering less in return.

Where to Go From Here

If you're an Australian who is now questioning property as your primary investment vehicle, I'd encourage you to take a serious look at gold, silver, and platinum. Particularly inside an SMSF, where the tax advantages right now are as strong as they've ever been.

Feel free to reach out to us at Liberty Bullion if you have questions about precious metals or self-managed super funds. We're more than happy to help.

What a time to be alive. Sam from Liberty Bullion.