The federal Budget has proposed major changes to negative gearing and capital gains tax – and property investors are now reassessing their plans.
 
From 1 July 2027, negative gearing for residential property would largely be limited to new builds. At the same time, the current 50% capital gains tax (CGT) discount would be replaced with a system based on inflation indexation and a new 30% minimum tax on capital gains.

Why current investors may avoid major changes

Importantly, existing investment properties held before 12 May 2026 would be exempt from the negative gearing changes.
 
That means many current investors may see little immediate impact.
 
But for future buyers, the picture could change significantly.

Why new builds matter more now

The Budget papers make it clear the government wants to encourage investment into newly constructed housing. Investors who purchase eligible new builds would still be able to access negative gearing and choose between the current CGT discount or the new indexed approach.
 
That could shift more investor demand toward:
  • Off-the-plan apartments.
  • House-and-land packages.
  • Duplex and townhouse developments.

Why investors are reassessing strategy

There’s still uncertainty around how the reforms will play out.
 
But regardless of the final outcome, the conversation around investment property strategy has clearly changed.
 
If you’re thinking about buying, refinancing or restructuring an investment loan, I can help you understand how these proposed changes could affect your borrowing strategy and long-term plans.