12/05/2026
🏠 Federal Budget 2026:
What Property Investors Need to Know
The Federal Budget was handed down tonight, and housing is at the very heart of the government’s new tax reform package.
These are some of the most significant changes to property tax we’ve seen in decades.
If you’re an investor or planning to buy, here is a quick summary of the key changes to Negative Gearing and Capital Gains Tax (CGT):
📉 Negative Gearing Changes
Existing Properties: If you already own an investment property or purchased one before 7:30 PM AEST on 12 May 2026, your current negative gearing arrangements are protected. You can continue to deduct losses against your other income.
New Purchases (Existing Homes): For established properties bought after tonight, negative gearing will be limited from 1 July 2027. You will still be able to deduct losses against residential property income and carry forward unused losses, but you won't be able to deduct them against your salary.
New Builds: To encourage supply, newly constructed homes remain fully exempt from these restrictions.
💰 Capital Gains Tax (CGT) Reform
The 50% Discount is Changing: From 1 July 2027, the 50% CGT discount for individuals and trusts will be replaced by a cost-base indexation model (similar to how things worked before 1999).
Real Gains Only: Under the new system, you only pay tax on the profit that exceeds the rate of inflation.
Minimum Tax Rate: A new 30% minimum tax rate on capital gains will be introduced to ensure high-income earners pay a fair share when selling assets.
Investor Choice: If you build a new home, you can choose between the old 50% discount or the new indexation system when you sell.
🏗️ Other Housing Highlights
$2 Billion for Infrastructure: New funding to help local councils build the roads, sewerage, and services needed to unlock 65,000 new homes.
Trusts: A 30% minimum tax will apply to discretionary trusts starting 1 July 2028.
What does this mean for you?
The "grandfathering" of existing investments means there is no immediate change for your current portfolio. However, your strategy for future acquisitions—particularly established vs. new builds—may need a rethink
