The 2026 Federal Budget brought the biggest shake-up to property tax in decades. Negative gearing and the capital gains tax discount are both changing, with the main rules starting from 1 July 2027.
A lot of investors are asking the same questions. Does property still work? Should I sell what I've got? What should I buy next? Here's our plain-English take, as at October 2026.
What's changing: the short version
Negative gearing on established homes
If you buy an established residential property after budget night (7:30pm AEST, 12 May 2026), you'll lose the ability to offset rental losses against your salary from 1 July 2027. Losses can still be offset against residential property income, and any extra can be carried forward to use later.
New builds keep negative gearing
Eligible new builds keep full negative gearing. That generally means new dwellings that add to housing supply, like a home on vacant land, an off-the-plan apartment, or a knockdown rebuild that replaces one house with more dwellings. Renovations, a single-house knockdown rebuild, or a granny flat on an established block generally don't count.
The CGT discount is being replaced
From 1 July 2027, the 50% capital gains tax discount is being replaced with indexation, so you're taxed on gains above inflation. A minimum tax rate of 30% also applies to those gains. Gains made before 1 July 2027 on assets you already hold keep the old treatment. Your main residence stays exempt.
What's not affected
- Properties you owned (or had contracts on) before budget night are grandfathered for negative gearing