Why the 2026 Australian Federal Budget Makes the PMAC Trust a Smarter Investment

The 2026–27 Federal Budget has turned Australia’s investment landscape upside down. With sweeping changes to capital gains tax (CGT) and negative gearing, many investors who’ve relied on growth-focused strategies are now reassessing where to put their money.

For property investors, SMSF trustees, and high-net-worth individuals looking for reliable income, Active Property Group’s (APG) pooled mortgage fund, the PMAC Trust, is looking considerably more attractive in this new environment.

Here’s why the budget changes may benefit income-focused investors and what makes the PMAC Trust worth a closer look.

What Did the 2026 Budget Actually Change?

Before diving into what it means for you, it helps to understand the key announcements.

1. Capital Gains Tax reform (from 1 July 2027) The Government is replacing the existing 50% CGT discount with a cost-base indexation method, plus a 30% minimum tax on capital gains. This applies to individuals, trusts, and partnerships who hold assets for at least 12 months. Importantly, superannuation funds are excluded. Super retains its one-third CGT discount.
2. Negative gearing restricted for established residential property From 1 July 2027, investors who purchase existing residential properties will no longer be able to offset rental losses against wages or other income. Those losses will instead be quarantined and can only offset residential rental income or capital gains.
3. Minimum 30% tax on discretionary trusts (from 1 July 2028) Discretionary trusts used to distribute discounted capital gains to lower-income beneficiaries will face a 30% minimum tax on taxable income.

Together, these measures significantly reduce the tax efficiency of leveraged growth investing in established residential property.

Why This Is Good News for Pooled Mortgage Fund Investors

The PMAC Trust Was Never Built on Tax Tricks

Many growth-focused property strategies depend heavily on CGT discounts and negative gearing to deliver their after-tax returns. Strip those away and the investment thesis changes fundamentally.

The PMAC Trust doesn’t work that way. APG’s pooled mortgage fund is designed around:

• Interest income distributions (not capital appreciation)
• Capital preservation (not speculative growth)
• Secured lending (not leveraged property speculation)

That means the PMAC Trust is largely unaffected by the new CGT regime. Returns from the fund are already taxed as ordinary income, so investors aren’t relying on discounts that are now being wound back.

Traditional Property Investing Just Got More Expensive

Under the new rules, buying an established residential investment property means you can no longer deduct losses against your salary. That changes the maths significantly for negatively geared investors, particularly in high-cost markets like Sydney and Melbourne.

For investors who’ve used negative gearing as a core part of their strategy, this is a material shift. Combined with higher CGT liabilities from 2027, the after-tax return on established residential property looks thinner than it used to.

By contrast, PMAC Trust’s investment case is built on consistent quarterly distributions, which is income that doesn’t require property prices to rise or tax concessions to hold.

Income-Focused Investing Gets Relatively More Competitive

When growth strategies become less tax efficient, yield strategies become more attractive by comparison. This relative shift matters.

Investors who previously chose negatively geared property for its tax sheltering benefits may now find that a well-managed income fund stacks up more favourably. This is especially true when comparing:

• After-tax yield on established property (now lower with quarantined losses)
• CGT exposure on eventual sale (now higher from 2027)
• Administrative complexity of dual cost-base tracking and transitional valuations

Against a fund like PMAC Trust, which offers:

• Quarterly income distributions
• Straightforward annual tax statements
• No dependence on CGT concessions
• No leverage required to generate returns

Why SMSF Trustees Should Pay Attention

Australia’s SMSF sector is growing faster than ever. According to market data, the September 2025 quarter saw 14,500 new SMSFs established. This is the highest level on record, bringing total SMSF assets beyond $1 trillion.

And SMSFs are shifting toward private credit and mortgage funds. One analysis showed SMSF allocations to real estate private credit grew by nearly 25% year-on-year in FY25, with adviser-supported SMSFs growing FUM by 130% over the same period. That trend predates the Budget and the new tax changes give it further momentum.

Here’s why PMAC Trust suits SMSF investors particularly well:

Predictable income for pension-phase trustees. SMSF members in pension phase need reliable distributions to meet minimum drawdown requirements. PMAC Trust’s quarterly distributions align well with that need.

Capital stability. The fund targets capital preservation rather than capital growth, which fits the risk profile many SMSF trustees prioritise as they move toward or into retirement.

CGT changes don’t apply to super. Superannuation funds are exempt from the new CGT discount changes. That means SMSF investors in the PMAC Trust keep the existing one-third CGT discount while investors in growth assets outside super face higher tax bills.

Accepted as an SMSF investment. PMAC Trust accepts investments from individuals, companies, trusts, and self-managed super funds, and is open to both retail and wholesale investors.

What Makes the PMAC Trust Different?

Not all pooled mortgage funds are the same. Here’s what sets APG’s PMAC Trust apart:

Secured lending with conservative LVRs All loans in the PMAC Trust are secured either by registered first or second mortgages over Australian property. APG typically lends up to 75% max of the property value, providing a meaningful equity buffer in the event of borrower difficulties.

Independent oversight The PMAC Trust is overseen by independent trustee Primary Securities Ltd (AFSL No. 224107) and audited by an independent, qualified auditor. It holds an IIR “Recommended” rating.

Skin in the game APG’s directors invest their own money in the fund. This meaningful alignment of interest sets it apart from many fund managers.

No hidden fees Returns are net of fees for wholesale investors. Retail investors pay around a 0.5% fee to the independent trustee. There are no application, custodial, or performance fees.

Quarterly redemptions with no fixed term Unlike many mortgage funds that lock capital in for years, PMAC Trust allows redemption requests on a quarterly basis. Requests are lodged three weeks before quarter-end, and APG has consistently met redemption requests on time.

Strong recent performance The PMAC Trust delivered 8%-9% consistently in the last five years. Granted, past performance doesn’t guarantee future returns. However, the fund has had a reliable track record for a decade now.

Important Trade-Offs to Consider

The PMAC Trust isn’t for every investor, and it’s important to go in with clear eyes. Key risks include:

• Credit risk – borrowers can default, though all loans are secured by Australian real estate
• Liquidity risk – redemptions are quarterly, not on-demand, so this isn’t a cash substitute
• Valuation risk – in a stressed property market, the value of security assets can decline
• Income tax – distributions are taxed at marginal rates, so high-income earners should model their after-tax return

The budget changes don’t make the PMAC Trust automatically superior to all growth investments. Whether or not PMAC Trust is right for you still depends on the investor’s individual goals. 

However, due to major regulation shifts, it’s worth noting that growth strategies that depended heavily on negative gearing and CGT discounts look less efficient than they did a month ago. Income strategies that were already taxed at marginal rates and didn’t rely on those concessions are relatively less disadvantaged.

The Bigger Picture: Private Credit Is Growing

The structural case for private credit and mortgage income funds was strong before the Budget. It’s stronger now.

Australia’s private credit market is now valued at $224 billion and growing at roughly 9% annually. This is on track to rival the domestic public bond market. Real estate private credit is forecast to reach approximately $90 billion by 2029.

The budget changes add a policy tailwind to this structural trend. As growth-focused investing becomes less tax efficient, more capital is likely to flow toward:

• Predictable yield
• Asset-backed income
• Lower-volatility defensive strategies

PMAC Trust sits squarely in that category.

Ready to Learn More?

If you’re reassessing your investment strategy in light of the 2026 Budget changes, or you’ve been looking for a stable income solution for your SMSF or investment portfolio, Active Property Group would love to help you explore whether PMAC Trust is right for you.

Download our Investor Pack to learn how PMAC Trust works, how returns are calculated, and how to get started.

Or book a call with our team to talk through your situation.

Capital at risk. Returns not guaranteed. Past performance is not indicative of future performance. This article is general in nature and does not constitute financial advice. Investors should consider their personal circumstances and seek independent financial and tax advice before making investment decisions. The information in this article relates to proposed budget measures that are yet to be legislated and may be subject to amendment.

If you have any questions about investing in private mortgages then please send us a message via our Contact Page.