Australia's New Property Tax Rules: A Clear Guide for Owners and Investors
What is actually changing?
Two long-standing tax settings are being reformed for residential property:
- Negative gearing will be limited to new builds. Today, if your rental property costs more to hold than it earns, you can claim that loss against your other income (such as your salary). Under the proposal, for established properties bought after Budget night, those losses can no longer be claimed against your wages — they’re “quarantined” and can only offset other residential rental income or future capital gains.
- The capital gains tax (CGT) discount is changing. The current 50% discount is being replaced with an inflation-based system, plus a minimum 30% tax rate on gains. The aim is that you’re taxed on your real gain rather than gains caused by inflation. This applies only to gains that build up after 1 July 2027.
If you already own, you’re largely protected
This is the part most worth understanding. Any property held at 7:30pm on 12 May 2026 – including a property you had under contract but not yet settled — is grandfathered. You can keep negatively gearing it under today’s rules for as long as you own it.
What is exempt or unaffected?
- New builds keep both negative gearing and the 50% CGT discount — the policy is designed to encourage new housing supply.
- Commercial property is not affected and can still be negatively geared as it is today.
- Build-to-rent developments, widely held trusts and superannuation funds have their own carve-outs.
- Shares and other investments are not part of these property changes.
Will rents and prices really change?
Probably – but not everywhere, and not all at once. A nationwide “rental boom” is too simple a story for a few reasons:
- The rules are staged, starting in mid-2027, and existing investors are grandfathered. Change will build gradually, not overnight.
- Rent increase frequency is capped by law in every state (generally once every 12 months), so rents can’t jump suddenly.
- Selling a rental is slow and costly – tenancy rules, transaction costs, CGT and debt all apply — so supply won’t collapse quickly.
The more likely outcome is divergence by location. Areas with strong renter demand but low yields may see investor interest cool while rents stay firm. Outer growth corridors with lots of new supply could see vacancies rise. Regional markets with higher yields may attract more capital. The headline number for “Australia” will mean less than what’s happening in your own suburb.
Yield and cash flow become more important
For new purchases, investors will have a stronger reason to care whether the rent actually covers most of the costs, rather than relying on a tax refund to bridge the gap. That shifts attention toward higher-yielding properties and locations – and may make some lower-yield, well-located established suburbs less attractive to buy into, even though renters still want to live there.
So what should property owners do?
There’s no single right answer, and that’s the point. Depending on your situation, you might:
- Hold – if your property is grandfathered, your existing tax position hasn’t changed.
- Buy – for new investors, yield, cash flow and location matter more than ever, and new builds keep their concessions.
- Sell – some owners will decide it’s the right time to take a gain or simplify their portfolio.
Whatever you choose, the worst move is a rushed one. Review your own numbers, get advice that fits your circumstances, and decide on your timeline – not the news cycle’s.
Whichever path you choose, you have options
Our goal is simple: to help you make an informed decision – whether that means keeping your property, managing it more efficiently, or selling.
If you’re holding and want to keep more of your return
With tax concessions narrowing for future purchases, every dollar of cost matters more. Many landlords are looking at self-managing their property and cutting ongoing management fees – rather than paying 7–8% of rent year after year. We’re also building some new MyPlace tools to make self-management simpler, from finding tenants to handling the admin.
If you’re considering selling
As some investors restructure their portfolios in response to the changes, more investment properties may come to market over the next few years. If you decide selling is right for you, you don’t need a traditional full-service agent: you can sell privately, advertise directly on realestate.com.au and Domain, keep control of the process, and avoid paying agent commission – often a saving of tens of thousands of dollars.
Hold, manage, or sell – there’s a path for each, and we’re here to help you weigh them.
Thinking of selling?
Skip the agent commission. Keep more of your gain. List your property privately on Australia’s longest-running FSBO platform.
This article is general information only and reflects proposed changes that are not yet law. It does not constitute tax, legal, or financial advice and does not take your personal circumstances into account. Before making any decision to buy, hold or sell, please seek advice from a qualified accountant, financial adviser or tax professional. For official detail, see the Australian Taxation Office (ato.gov.au) and the Federal Budget (budget.gov.au).