Negative Gearing and CGT Reform 2026 — What Property Investors Need to Know

Oct 7

2 min read

The old Drive drafts needed updating

Earlier ELT material discussed proposed negative-gearing and CGT changes. The 2026–27 Budget reforms have since moved into legislation/implementation, so older draft wording should not be reused without this update.

Negative gearing from 1 July 2027

The Government's current policy/legislative framework limits negative gearing for residential property to new builds from the 2027–28 income year.

Existing investments made before 7:30pm AEST on 12 May 2026 are grandfathered from this change.

For established residential property bought after that time, losses will no longer be deductible against non-residential income such as salary from 1 July 2027. Losses can instead be used against residential-property income, including relevant capital gains, with excess losses carried forward.

CGT from 1 July 2027

The reforms replace the general 50% CGT discount with inflation-based indexation for gains accruing from 1 July 2027 and introduce a 30% minimum tax rate on real capital gains under the new rules.

Investors in qualifying new builds can choose between the existing 50% CGT discount and the new inflation/indexation arrangement, subject to the final legislative rules.

Why investors should not act from headlines

The transition rules, definitions of new builds, ownership structures and individual tax circumstances can materially change the result. Tax law is not a property-sales script.

Practical property takeaway

If comparing a new build and an established investment property, include the future tax treatment in the questions you take to your accountant rather than assuming today's rules apply forever.

Message INVEST with the property type + purchase timing if you want help organising the property comparison questions for your accountant/broker.

Thao Pham | 0452 526 888 | info@eltnetwork.com | Class 1 Licensed Real Estate Agent — Licence No. 20375265

General information only; not tax or financial advice.

Sources

Australian Treasury — Budget 2026–27 tax system changes.

Treasury Laws Amendment (Tax Reform No. 1) Act 2026 / current Treasury implementation material.