Property investors: the negative gearing rules changed on 12 May 2026.
From 1 July 2027, established residential properties bought after Budget night lose the ability to negatively gear against your salary. New builds are the one residential category that keeps it. Here's a clear look at what it means for you.
See how it affects youWhat actually changed in the 2026 Budget
It comes down to one date and three situations. This is the rule as announced, not a sales angle.
Held before 7:30pm AEST, 12 May 2026
Properties you held (or had under contract) before Budget night keep negative gearing under the current rules, for as long as you hold them.
Established property bought after Budget night
From 1 July 2027, rental losses can only be offset against your residential property income, not your salary or wages. Unused losses carry forward to future years.
A new build, bought any time
Eligible new builds keep full negative gearing, and investors can still choose the 50% capital gains tax discount or the new indexation method when they sell.
Source: Federal Budget 2026 to 27, budget.gov.au. The general 50% CGT discount is being replaced with an inflation based discount and a minimum 30% tax on gains from 1 July 2027.
Where do you sit?
Pick the option that fits you for a clear read on what the change means for your position.
Why new builds are getting a second look right now
Beyond the tax treatment, today's rental market adds to the case for getting the timing right.
New builds keep negative gearing against your broader income
For purchases after Budget night, eligible new builds are the one residential path that retains the full benefit.
A choice on capital gains tax
New build investors can elect either the existing 50% CGT discount or the new indexation and minimum tax method when they sell.
A very tight rental market
The national vacancy rate sat around 1.2% in April 2026, still well below a balanced market, with rents continuing to rise.
SQM Research, April 2026Higher depreciation potential on new stock
Newer dwellings generally carry more depreciation in the early years than older established homes, which can support cashflow. Your accountant can confirm the detail for any specific property.
A bit about who you'd be talking to
Ross McFarlane
I'm a mortgage broker who works closely with property investors, and a lot of that work is around new builds and house and land. If you haven't found a property yet, we have networks to help you find one, and from there I handle the finance end.
After close to seven years broking, my focus is simple: compare the lenders properly, structure the borrowing so it fits the plan, explain the rules plainly, and get the finance right.
When a change like this lands, most of the noise is either panic or a pitch. My job is to cut through it with the facts and an honest read on whether building or buying new genuinely suits you, or whether sitting tight is the smarter call.
Ross McFarlane, Credit Representative 526725 of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.
MFAA member. Member of the Australian Financial Complaints Authority (AFCA 78297).
Let's map your options
A few quick questions about what you're looking at. We'll be in touch to talk it through, show you where you sit under the new rules, and look at how the finance could work for you. No obligation.
Ross McFarlane, Credit Representative 526725 of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169. MFAA member. Member of the Australian Financial Complaints Authority (AFCA 78297).