How FY27 Tax Changes Reshape Accommodation Finance
FY27 Tax and Accommodation Finance | Switchboard Finance
Accommodation
FY27 Tax · Accommodation · Structure
How FY27 Tax Changes Reshape Accommodation Finance
The 2026-27 Budget moves the timing and structure of an accommodation deal more than the borrowing itself. Here is which FY27 changes touch how a venue is held and funded, and which ones leave the finance alone.
Quick Answer
The Federal Budget reshapes the timing and structure of a going concern accommodation purchase more than the borrowing itself. Changes to the write-off, loss carry-back and how letting entities are held touch the way a venue is funded, not whether finance is available. Read them as a structure question, then map your situation in our accommodation finance hub.
What does the 2026-27 Budget change for an accommodation business?
The 2026-27 Budget changes the timing and structure of an accommodation deal far more than it changes the finance behind it. The headline items, a more generous instant asset write-off, a reintroduced loss carry-back, and the legislated CGT and negative gearing changes that begin in FY28, all touch how a venue is held and when you act, not whether a lender will fund it. The change sorts the decision, it does not switch finance off.
That distinction matters because an accommodation deal is funded on its trade. A going concern is valued on maintainable earnings, and a lender's read of the file rests on the trade and the security long before any Budget line item enters the picture. The Budget changes the after-tax maths of holding and selling, which is your accountant's domain, while the borrowing question stays with the broker. Our going concern guide sets out how that valuation actually works.
So the practical task this year is not a race to settle before 30 June. EOFY is a strategy window, not a deadline rush. The smarter move is to line up the structure first, raise it with your accountant early, and let the deal economics, not the tax calendar, drive the timing.
The FY27 changes that actually touch how you hold and fund a venue
The FY27 changes that matter to an accommodation owner cluster into three groups: what you can deduct on a fit-out, how a soft year is treated, and what it costs to carry an ATO debt. Each one shifts the after-tax position of holding a venue, which is why they are worth mapping before you structure a purchase or a refurbishment. The table below pins each change to its primary source and an as-of date.
The write-off is the one operators ask about most, and the key point is scope: the write-off touches fit-out, not the freehold. A cabin refurbishment, new kitchen equipment or a reception fit-out can qualify in the year it is installed and ready for use, indicative and subject to your accountant's read, while the building itself sits outside it. That changes how you phase a refurbishment, and it sits naturally alongside a purchase funded through motel finance.
Which holding structures still pass the lender read
Most FY27-driven structures still pass a lender's read cleanly, because the trade and the security are what a lender weighs first, not the entity wrapper around it. The CGT and negative gearing changes legislated for 2027, and the announced trust changes, are a tax-planning matter, and a sensible holding structure is treated as a normal feature of an accommodation file rather than a red flag. On a sale, the four small business CGT concessions remain, accessed through the small business turnover test or the maximum net asset value test, which your accountant will model against your numbers. The card pair below shows what tends to read clean and what tends to stall.
Tends to pass
- A trading entity with clean, current figures, since letting entities often sit in a trust and a lender expects that
- Fit-out phased to the write-off while the freehold is funded separately
- A purchase timed on deal economics, not on the tax calendar
- ATO obligations kept current, so no GIC drag on serviceability
Tends to stall
- A last-minute restructure rushed to beat 30 June with unfinished accounts
- A carried ATO debt growing under non-deductible interest charges
- Expecting the write-off to cover the building itself
- A structure changed for tax reasons that no accountant has signed off
Where a refurbishment is part of the plan, remember that cabin and amenities works also answer to build standards set by the Australian Building Codes Board, which shapes what a fit-out spend actually buys. None of this stops a deal. It simply means the structure question is settled with your accountant before the file reaches a lender, and the loan is then freehold or leasehold finance built on the trade.
Match your situation to the FY27 move
The FY27 changes land differently depending on whether you are buying, holding or exiting an accommodation business. The map below sorts the three common situations and the structure question each one raises. Each is general guidance, and the detail belongs with your accountant.
Select your situation
Time the fit-out, not the settlement.
Buying a venue is funded on its trade, so the purchase timing follows the deal, not the tax year. The FY27 move is to phase the fit-out and equipment to the write-off once you own it, while the freehold or leasehold is funded separately. Line the structure up with your accountant before the file reaches a lender.
Strategy windowThe 2026-27 Budget reshapes the timing and structure of an accommodation deal, not the finance under it. The write-off touches fit-out rather than the freehold, the loss carry-back and ATO interest changes shift the after-tax maths of holding a venue, and the CGT and negative gearing changes legislated on 26 June 2026 commence on 1 July 2027, with the discretionary-trust minimum tax set for 1 July 2028. Borrowing capacity still rests on the trade the lender reads first.
Key takeaway: Settle the structure with your accountant early, then fund the trade. The change sorts the decision, it does not switch finance off.Frequently Asked Questions
The 2026-27 Budget changes the timing and structure of an accommodation purchase more than the finance behind it. The instant asset write-off, the reintroduced loss carry-back and changes to how letting entities are taxed all touch how a venue is held, not whether you can fund it. Treat each as a structure question and raise it with your accountant early. Our going concern guide explains how a venue is valued and funded.
The instant asset write-off can apply to qualifying fit-out and equipment in a motel refurbishment, but not to the freehold itself. The asset has to be installed and ready for use by the cut-off for the relevant year, and the $20,000 threshold is legislated to 30 June 2026 with permanence announced, not yet law, from 1 July 2026 for businesses under the turnover cap. Confirm eligibility with your accountant and see how a refurbishment sits inside motel finance.
The FY27 tax changes do not switch finance off, they sort the decision around it. Borrowing capacity on a going concern still rests on the trade and the security a lender weighs first, rather than on the Budget line items. Where the changes bite is serviceability at the edges, for example a non-deductible ATO interest charge tightening cashflow. See going concern for how the trade drives the read.
Whether to wait until FY27 to buy depends on your structure and timing, not on a single deadline. EOFY is a strategy window, not a deadline rush, because the write-off still needs the asset installed and ready by 30 June 2026 to land in FY26, otherwise it rolls into FY27 under the same rules. The deal economics usually matter more than the tax year. Our succession and vendor finance recap covers timing a sale or purchase.
Trust and CGT changes affect a letting entity because letting entities often sit in a trust. The CGT discount changes are legislated and commence on 1 July 2027, while the announced minimum tax on trust distributions is timed for 1 July 2028 and is not yet law. The planning question is how the entity is held over the next two years, with a restructure rollover flagged alongside. Speak to your accountant and see how holding structures feed into vendor finance on a sale.
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