The negative gearing changes, explained properly.

From 1 July 2027, negative gearing is limited to eligible new builds for residential property acquired after 7:30pm AEST on 12 May 2026. Losses on an affected property can no longer be offset against salary or other income; they are quarantined and carried forward against future rental income or a future capital gain instead. Property held before that moment is grandfathered and keeps the current treatment until it is sold. The same Act also replaces the 50% CGT discount with cost base indexation plus a 30% minimum tax rate on gains accruing from 1 July 2027.

It has not been abolished, and that distinction matters. Negative gearing still applies in full to grandfathered properties and to eligible new builds, with no time limit on the grandfathering. What changed is the treatment of losses on established property bought after Budget night 2026: the deduction is deferred rather than removed, because a quarantined loss still offsets future rental profits and still counts against the capital gain when the property is sold.

If you held the property, or had exchanged a contract on it, before 7:30pm AEST on 12 May 2026, yes. The test is the contract date rather than the settlement date, which catches investors who exchanged before the cut-off and settled after it. Grandfathering runs until you sell the property, with no expiry, and it does not transfer to a buyer.

A genuinely new dwelling. Knock-down rebuilds and substantial renovations that do not increase the number of dwellings do not qualify. The property must not have sold before, unless the first owner was the builder and left it unoccupied for no more than 12 months. Eligible new builds keep both negative gearing and the more favourable capital gains treatment, which is the policy's deliberate push toward new supply.

The negative gearing change applies to individuals, partnerships, companies and most trusts. Super funds including SMSFs, and widely held trusts such as most managed investment trusts, were excluded from it. The capital gains tax change is broader and is not limited to property, so it reaches share portfolios and other CGT assets as well.

It is carried forward, not lost. A quarantined loss can be offset against future rental income from residential property, and against the capital gain when you sell. The economic effect is timing: the deduction arrives later, and a deduction deferred for years is worth materially less than one claimed this year.

The 50% CGT discount for individuals, trusts and partnerships is replaced with cost base indexation plus a 30% minimum tax rate on real gains accruing from 1 July 2027. It applies to all CGT assets, not just property, which is the part most of the coverage skipped. Indexation protects the inflationary component of a gain, so the outcome depends heavily on the holding period and the inflation rate across it. A sale after that date has to apportion the gain either side of it.

Very likely, if you will still own the property on 1 July 2027. The new capital gains treatment applies to gains accruing from that date rather than to whole sales after it, so a gain on a property held either side has to be apportioned between the two regimes - and apportioning it needs a defensible value at the changeover. A valuation obtained at the time carries far more weight than one reconstructed years later. Organise it in the first half of 2027, not in the year you sell.

Only if the property stacks up on its own numbers. The cut-off has passed, so grandfathering is no longer available on a new purchase. What remains is the new-build exemption, and buying a property you would not otherwise buy in order to secure a tax treatment is how investors overpay. Run the holding cost first, then decide.