The 2026 Federal Budget has introduced significant proposed changes that will impact Australia’s property investment landscape, particularly around negative gearing and capital gains tax (CGT).
As these reforms continue to be analysed across the sector, it’s important for advisers to understand what has been announced, the proposed timelines, and the potential implications for investment strategy moving forward.
Key announcements
Negative gearing changes
From 1 July 2027, the government has proposed limiting negative gearing concessions to new residential builds only. Existing investment properties held before budget night are expected to be grandfathered under the current rules.
For established properties purchased after budget night, losses would no longer be deductible against wage income, but may still be offset against future residential property income or gains. For all established properties owned prior to budget night, negative gearing still applies going forward.
Capital gains tax (CGT) changes
The budget also proposes replacing the current 50% CGT discount with an inflation-indexed model and introducing a minimum 30% tax rate on gains from 1 July 2027 for all established property. For new property, sellers will be entitled to select their preferred methodology from either the previous 50% CGT discount model or the inflation-indexed model.
The government has stated that gains triggered by a sale event, prior to the commencement date would remain under existing arrangements.
What this means for the sector
These proposed reforms represent one of the most significant shifts to property investment taxation in decades and are expected to influence:
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Investor confidence and sentiment
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Demand dynamics between established properties and new builds
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Long-term portfolio planning
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Rental supply considerations across Australia
PIPA will continue to advocate for professional, evidence-based policy discussion that supports sustainable housing outcomes and informed property investment advice.
Further reading
We encourage members to review the official budget resources below:
As further detail emerges, PIPA will continue to keep members informed with updates and industry commentary.
For and on behalf of PIPA,
Property Investment Professionals of Australia
