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PROPERTY & INDUSTRY INSIGHTS:
2026 Federal Budget: What Every Property Investor in Australia Needs to Know
2026 Federal Budget: What Every Property Investor in Australia Needs to Know
On the night of 12 May 2026, the Australian Federal Government handed down the 2026-27 Budget, introducing the most significant changes to property investment tax rules in over 25 years.
As an Off-The-Plan Strategist based on the Gold Coast and Brisbane, Susana Tuya has spent years helping investors build wealth through strategic property purchases.
Here is an accurate, plain-English breakdown of exactly what changed and what it means for you.
This page is general information only. Susana Tuya is not a financial planner or tax adviser. Please seek your own professional advice for your specific situation.
As an Off-The-Plan Strategist based on the Gold Coast and Brisbane, Susana Tuya has spent years helping investors build wealth through strategic property purchases.
Here is an accurate, plain-English breakdown of exactly what changed and what it means for you.
This page is general information only. Susana Tuya is not a financial planner or tax adviser. Please seek your own professional advice for your specific situation.
What Changed on Budget Night
Negative Gearing on Established Properties — Removed
For any established (secondhand) property purchased after 7:30 pm on 12 May 2026, negative gearing has been removed.
Investors can no longer offset rental losses against their salary or other income.
Unused losses can be carried forward and offset only against future residential property income.
New Builds — Negative Gearing Retained
Investors who purchase a brand new property after budget night retain full negative gearing.
Losses from new build investments can still be offset against all other income, including wages.
Capital Gains Tax — New Builds Get the Choice
From 1 July 2027, the 50% CGT discount will be replaced by a CPI indexation model with a 30% minimum tax on gains.
Investors in new builds can choose between the 50% CGT discount or the new indexation model when they sell, whichever is more beneficial.
Grandfathered Properties — Negative Gearing Unchanged
All properties owned before 7:30 pm on 12 May 2026, including contracts signed but not yet settled, are fully grandfathered.
Negative gearing remains unchanged on these properties with no time limit.
CGT on Grandfathered Properties
The 50% CGT discount applies to all gains accrued up to 1 July 2027.
Gains arising after that date will be subject to the new CPI indexation model and 30% minimum tax.
Discretionary Trusts
A minimum 30% tax will apply to discretionary trust distributions from 1 July 2028.
Rollover relief is available for those wishing to restructure between 1 July 2027 and 30 June 2030.
Have We Been Here Before?
Yes. In 1985, the Hawke government abolished negative gearing. Rents spiked almost immediately across Sydney and Perth. The policy was reversed just two years later in 1987.
In 1999, the Howard government introduced the 50% CGT discount, a measure that was reversed in last night's budget.
That single decision turbocharged property investment in Australia for over two decades.
These changes are significant.
It is also worth noting that none of these measures has yet been legislated.
They must still pass parliament, where the Coalition has indicated opposition.
Yes. In 1985, the Hawke government abolished negative gearing. Rents spiked almost immediately across Sydney and Perth. The policy was reversed just two years later in 1987.
In 1999, the Howard government introduced the 50% CGT discount, a measure that was reversed in last night's budget.
That single decision turbocharged property investment in Australia for over two decades.
These changes are significant.
It is also worth noting that none of these measures has yet been legislated.
They must still pass parliament, where the Coalition has indicated opposition.
Why New Builds Are Now the Winning Strategy
Under the new rules, new builds are the only investment property type that retains full negative gearing for buyers after budget night.
Combined with the CGT choice and higher depreciation benefits, new builds now offer a clear tax advantage over established properties for investors entering the market from 12 May 2026 onwards.
The government has deliberately structured these changes to push investment toward new construction and increase housing supply.
Under the new rules, new builds are the only investment property type that retains full negative gearing for buyers after budget night.
Combined with the CGT choice and higher depreciation benefits, new builds now offer a clear tax advantage over established properties for investors entering the market from 12 May 2026 onwards.
The government has deliberately structured these changes to push investment toward new construction and increase housing supply.
What Should You Do Now?
Strategy and structure must come before purchase.
The investors who will benefit most from this new landscape are those who take the time to understand the rules and position themselves correctly before they buy.
This is exactly what Susana Tuya and the team at Developments Direct do.
From the Gold Coast to Brisbane and beyond, we help our clients identify the right new-build opportunities, in the right structure, at the right time.
If you would like to understand what these changes mean for your situation and explore how new builds can work as a winning strategy for you, reach out today.
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About the Author
Susana Tuya is the Founder of Developments Direct, a Queensland-based off-the-plan consultancy. She works with a select group of discerning buyers to position them into pre-market and off-market opportunities across Brisbane, Gold Coast & SEQ High-Growth areas. Her approach is strategy-led, focusing on timing, positioning, and long-term outcomes |
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