It is understood this would include, for example, shops owned by the church in the Sydney Town Hall arcade, Sydney Square and St Andrew's House, as well as properties such as those rented as the barrister's chambers of St James.

LGBT Anglicans and Indigenous leaders expressed outrage and concern as lawyers scrambled to understand the full implications of what they say is largely untested law.

"This is an alarming stifling of voices," said former Anglican pastor and co-chair of Equal Voices, Joel Hollier.

"There are so many LGBT Anglican people within our churches that long to have a place within the church. We are faithful, deeply engaged and seeking to be a part of our church communities.

One Sydney lesbian churchgoer, who could not be identified for fear of retribution and stigma, said she cried when she heard of it, writing: "I'm appalled that the same prominent figures who we've heard championing 'religious freedom' in the last couple of weeks are now bringing this bill that would effectively shut down religious freedom on any church property."

But Anglican leaders say the bill, currently before the Synod of the church, which is being held this week and next in Sydney's CBD, just aims to clarify existing doctrine.

'The church's doctrine of marriage has not changed'

The nub of the proposal, by the Religious Freedom Reference Group, chaired by Bishop Michael Stead, is that "church property must not be used for purposes which contravene the doctrines, tenets and beliefs of the diocese".

Examples given included advocacy of abortion, undertaking stem cell research, manufacturing weapons of war and "advocacy for transgender ideology (eg gender fluidity)".

Bishop Michael Stead said: "The essence of the policy is that church property should not be used for purposes which are contrary to the doctrine of the church. Because the Federal Government has changed its definition of marriage, the policy makes clear the church's doctrine of marriage has not changed and that property use scenarios relate only to man/woman marriage.

"The new policy doesn't represent a change in our position and I wouldn't expect it to have an effect on any activities currently occurring on church trust property.

"The use of church property has always been governed by various regulations and the latest policy merely consolidates these into a single, clear document."

The policy states that one central doctrine of the Sydney Diocese is that there are only two "expressions of faithful sexuality" -- "marriage between a man and a woman or abstinence in singleness". What will be banned from any church property is "advocacy for expressions of human sexuality" contrary to this.

What is unclear is how broadly "usage" and "advocacy" are to be interpreted.

A spokesman for the Sydney Diocese said it would not impact on, say, a gay married man negotiating a lease with the church, it would only impact on how he might use that property.

Asked by the ABC if this might apply to a stationery store that had same-sex wedding cards, a bookshop that sold books by a transwoman, or a coming-out party held at a store, he said the policy was intended for "predominant", not "incidental" use.

He added that he did not think the policy would apply to existing leases, but it would apply to negotiation of any future leases.

According to the proposed property policy, none of the properties could be used to "facilitate, or generate incomes from, activities which are inconsistent with the doctrines, tenets or beliefs of the Diocese."

Yoga, smoking ceremonies 'inconsistent' with values

It's not just same-sex marriage that is being targeted. Under the principle that church property must "not be used for the worship of other gods", yoga classes that "go beyond mere 'positional yoga' and involve meditative practices and chants derived from Hinduism, and smoking ceremonies where the purpose is to cleanse a place from the residual spirits of those who have died," are also to be banned.

This decision has angered some Indigenous leaders, who expressed disbelief that smoking ceremonies were considered "inconsistent" with Anglican values.

"It's a disappointing decision," said former inaugural chairperson of the Sydney Anglican Indigenous Peoples Committee and Sydney Anglican Pastor Ray Minniecon.

"Not sure if any Aboriginal people were consulted on the matter. But this is the most conservative diocese in the country."

In Melbourne, Indigenous woman of Ngarrindjeri descent, Senior Chaplain at Melbourne's Overnewton Anglican Community College, Helen Dwyer, said she was concerned how the smoking ceremonies would work with educational policies.

"My concern is that Indigenous people haven't been consulted and again white men have made decisions about what is best without consulting or being informed about the appropriateness or lack thereof of something.

"This looks like another version of assimilation."

Dominic Wy Kanak, the local Greens candidate for Wentworth and member of the management committee for the NSW Reconciliation Council, said: "The fact that the Synod's document singles out smoking ceremonies as one of the activities that could not be held on church property is deeply insulting to First Nations people.

"After centuries of abuse, some of it at the hands of churches, this is a backward step."

The Greens candidate urged the Synod to immediately delete the section for the proposal.

"We need healing, not banishment. I urge the church hierarchy to actively encourage the use of smoking ceremonies at church events to heal the damage caused by this damaging policy and build constructive relations between our people."

Policy released ahead of Wentworth by-election

The policy release comes in the lead-up to the Sydney Wentworth by-election to fill former prime minister Malcolm Turnbull's seat tomorrow, where 15.3 per cent of the electorate is Anglican.

In the lead-up to the by-election, leaks of the Ruddock Review into religious protections forced the Wentworth candidates to address their position on a federal law that would discriminate against LGBT students.

The review was commissioned by the Coalition after same-sex marriage was legalised and has yet to be released.

In response to the Anglican Synod's policy proposal, Labor's candidate for Wentworth Tim Murray today said: "Religious organisations have long maintained the right to operate their entities in a way that fits with their beliefs and doctrine -- marriage equality has not changed this."

Liberal candidate for Wentworth Dave Sharma said: "Ultimately it is a matter for these religious groups to decide on these matters, explain them and defend their rationale. I encourage all institutions to be as open and fair-minded as the Australian people."

Independent Dr Kerryn Phelps was also contacted for comment.

There are three Anglican schools, teaching thousands of students, in the Wentworth electorate and one school on the border.

Cranbrook School headmaster Nicholas Sampson said the school's campuses are not church-owned properties.

"While remaining true to the Anglican ethos on which our school was founded, Cranbrook School maintains policies which aim to ensure equality and diversity for all present and potential staff and students.

"Cranbrook School infrequently hires out a number of facilities ... approval for such use of school facilities is principally contingent on ensuring that they do not impede regular student learning, boarding or scheduled sport events."

Stephen O'Doherty, the chief executive officer of Christian Schools Australia, a national association representing Christian schools from 2002 to 2016, said the policy was "prudent, absolutely necessary and perfectly uncontentious".

"No reasonable person would seriously question the need to document in policy the church doctrines on these matters," he said.

"I always advised schools to clearly set out their expectations for teachers in relation to the moral and religious teachings they would be expected, as a requirement of their employment, to both teach and uphold -- ie model.

"This is because a Christian school is a community of lived faith, not a sterile set of bible verses that only need to be taught but not applied.

"It is for a very important reason that state and federal laws allow religious bodies to make choices in employment that are consistent with their doctrines and tenets. It is critical that this continue, otherwise there can be no guarantee that when families seek a faith-based education it will be delivered."

Legal experts warn of wider implications

Legal experts told the ABC that passing this policy could potentially have far-reaching consequences for healthcare, education and even commercial businesses in the Sydney diocese, the largest in the country.

Lessons learnt from SSM survey

I wondered if anyone else was feeling like me -- not quite sure how to encapsulate the impact of same-sex marriage, writes Heather Faulkner.

"For example, Commonwealth-funded aged care services are not permitted to discriminate against gay or transgender residents. If this policy requires Anglican aged care homes to not allow same-sex couples to share a bed, for example, then they would be caught between their obligations to the church and the law," said the director of legal advocacy at the Human Rights Law Centre, Anna Brown.

"If church property includes commercial assets tenanted by secular organisations or businesses then they will run into even bigger problems, because those tenants need to comply with the law, including anti-discrimination laws that require them to accept all their customers on an equal basis."

Sydney barrister Kate Eastman, SC, said the legal test in discrimination cases was not just about stating and adhering to the relevant religious doctrine, but also providing evidence that the policy is "necessary to avoid injury to the adherents of the church".

This has rarely been tested.

Three 'threats' to Christian marriage belief

The impetus to this decision appears to have come from a need to explicitly state doctrine that would allow a religion to discriminate.

The report from the standing committee -- which acts like the cabinet of the synod and last year voted to donate $1 million to the "No" campaign -- identified three threats to maintaining a traditional Christian belief about marriage.

The first is in relation to employment of staff -- the church's ability to hire those who share their views on marriage.

This was in part a response to the decision by the Victorian Court of Appeal in Christian Youth Camps Limited v Cobaw Community Health Services Limited in 2014 that held that if a religion did not refer to "marriage, sexual relationships or homosexuality" in their fundamental declarations of faith then it can be assumed they are not "fundamental doctrines of the religion."

The second threat was the use of church property by third parties and the real risk that, for example, a school may believe they are "legally required to hire out the school hall as a venue for a same-sex wedding".

The third threat was the concern that people who support same-sex marriage may sit on boards of their institutions.

The Sexual Orientation Change Efforts Survivors Group (SOCE) posted on Facebook: "The ideology that buttresses the ex-gay/ex-trans/conversion movement is now on show for the whole nation to see. It appears that, for the Sydney Anglican Diocese, the oppression of LGBTIQA+ individuals is central to the Christian faith."

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