What the 2026 Federal Budget Means for Property Owners and Investors

Last night the Federal Government handed down the 2026-27 Budget — and if you own an investment property or are thinking about selling or buying, there are some significant changes worth understanding.

Here's a straight summary of what was announced and what it means for you.

Negative gearing is changing — but existing investors are protected

From 1 July 2027, negative gearing on established residential properties will be restricted for any property purchased after 7:30pm AEST on 12 May 2026 (last night).

What this means in plain terms: if you buy an established investment property from today, you'll no longer be able to offset rental losses against your personal income from 2027. Instead, losses can only be offset against rental income or future capital gains from that property.

However — and this is important — existing property owners, including those already under contract before the announcement, are grandfathered and can continue to access negative gearing under the current rules.

Eligible new builds will remain fully exempt, with investors still able to access both negative gearing and the 50% CGT discount.

Capital gains tax is also changing

From 1 July 2027, the 50% CGT discount for individuals will be replaced with cost base indexation and a 30% minimum tax rate on real capital gains.

Investors who acquire new homes will be able to choose either the 50% CGT discount or the new arrangements when they sell the property. The changes won't impact the exemptions for main residences.

In other words — if you own your home, nothing changes for you.

What this means for the property market

These are the most significant changes to property taxation in more than 25 years. The practical impact over the next 12–18 months is still being assessed — but a few things seem likely:

• Some investors may look to sell established properties before July 2027, which could increase stock levels in the short term
• Demand for new builds is likely to increase given they remain exempt
• If investors exit established property, supply of rental stock could tighten further
• Rent prices could increase

What to do if you own an investment property

The most important thing right now is to speak with your accountant or financial adviser about how the changes affect your specific situation. Every investor's circumstances are different.

If you're also considering whether now is the right time to sell, we're happy to have a no-obligation conversation about what your property could achieve in the current market.

This is general information only and not financial or legal advice. Please consult a qualified adviser for guidance specific to your situation.