Published 14 May 2026 · 6 min read

Federal Budget 2026: What It Means for Australian Property Owners and Investors

The 2026 Federal Budget brings the biggest changes to property tax in a generation. If you own, want to buy, or plan to sell an investment property, here’s what’s changing — and what to do about it.

Change 1: Negative Gearing

How it works today

If your rental property runs at a loss, you can deduct that loss from your salary income to reduce the tax you pay.

What’s changing from July 2027

• Rental losses cannot reduce your salary income.
• Losses can only offset:
  • Other rental income, or
  • Capital gains from property.
• Any unused losses are carried forward to future years.

What stays the same

• Properties owned before 12 May 2026 — no change.
• New builds — full negative gearing still applies.
• Commercial property — unchanged.

Change 2: Capital Gains Tax (CGT)

How it works today

Hold a property for more than 12 months and you only pay tax on half of the gain.

What’s changing

• The 50% discount is removed.
• Your purchase price is adjusted for inflation (indexation).
• A minimum 30% tax rate applies to the gain.

Old vs new system — a real example

You buy a property for $500,000 and sell it for $1,000,000:

Property typically grows faster than inflation, so over the long term most investors will pay more tax on sale than they would today.

If you already own property

You’ll use a split calculation:

• Gain accrued before 1 July 2027 → old rules (50% discount).
• Gain accrued after 1 July 2027 → new rules (indexation).

New builds get a choice

For qualifying new builds, you can elect between the old 50% discount or the new indexation method — whichever gives the better outcome.

Who is actually affected?

Indirect market effects

• Less investor competition – potentially better conditions for first-home buyers.
• Rents may rise slightly in tighter markets.
• Established homes may soften in value while new builds firm.

What might happen in the market?

• A wave of Australian property owners and investors selling in the lead-up to 30 June 2027.
• Reduced listings after July 2027 as long-term holders sit tight.
• Stronger demand for new builds.
• Commercial property becomes comparatively more attractive.

6 smart actions to consider now

For sellers: timing matters

The key deadline is 30 June 2027

• Start your sale process early to avoid the bottleneck.
• The closer to the deadline, the more competition from other sellers.
• Selling privately through noagentproperty.com.au typically saves 2–3% in agent commission – which can be tens of thousands of dollars kept in your pocket as the market shifts.

For buyers: new builds are favoured

• Better tax treatment for qualifying new builds.
• Established homes may become less competitive on an after-tax basis.

Fundamentals still matter most: location, quality, and price. Tax tail shouldn’t wag the investment dog.

Final thoughts

This is the biggest reshape of Australian property tax in decades – but you have time to plan. Most changes don’t start until 1 July 2027.

This article is general information only and does not constitute tax, legal, or financial advice. Speak with a qualified professional about your specific circumstances.