For years, the traditional strategy for many Australian investors was simple: buy an established house, rent it out, claim the shortfall through negative gearing, then wait for capital growth and use the 50 per cent CGT discount to soften the tax bill later. The 2026–27 Federal Budget has changed that conversation. From 1 July 2027, negative gearing will be restricted to new builds, with established residential properties purchased after 7:30 pm AEST on 12 May 2026 no longer receiving the same treatment, according to the Government. Arrangements already in place for properties held before Budget night are protected.
This is a big shift from the 2016–17 Budget period, when the Government’s position was not to remove or limit negative gearing, and the policy debate focused heavily on whether investor tax concessions were helping or hurting housing affordability. In 2026, the Budget language has moved in the other direction. The Government says negative gearing and the CGT discount have added to demand for property and made it harder for some Australians, particularly younger buyers, to enter the housing market.
| Budget change | What it means for investors | Flash Conveyancing view |
| Negative gearing limited to new builds | Losses on newly acquired established homes may only be used against residential property income or future residential gains | Check timing carefully before signing or restructuring |
| Existing properties protected | Properties held before Budget night keep current treatment until sold | Do not assume selling and rebuying will preserve the same tax position |
| CGT discount replaced | From 1 July 2027, the 50 per cent CGT discount is replaced by cost-base indexation and a 30 per cent minimum tax on net capital gains | Long-term strategy matters more than quick-flip thinking |
| New builds treated differently | Investors in new residential property may still access more favourable settings | Off-the-plan and new build contracts need careful legal review |
Cash flow is the biggest sting. Under the new rules, losses on affected established homes are not wiped out, but they are quarantined. This means they can be carried forward and used against residential property income in future years, instead of immediately reducing wage or salary income. For investors already juggling interest rates, land tax, repairs, insurance and vacancy risk, that can turn a manageable holding cost into something much heavier.
The second punch is the CGT change. From 1 July 2027, the 50 per cent CGT discount will be replaced by indexation of the cost base, plus a minimum tax of 30 per cent on net capital gains. The reform will only apply to gains arising on or after 1 July 2027, with transitional rules to limit the impact on existing investments, according to the Government. Investors in new residential property will have the choice of using the 50 per cent discount or the new indexed approach.
This may create a “hold tight” effect for existing investors. If you sell a property with protected treatment, you may lose a valuable tax position. That does not mean every investor should sit on their hands, but it does mean the old habit of swapping one established property for another now needs a much sharper review. A sale, refinance, transfer between entities, change of ownership, trust restructure or off-the-plan purchase could all have implications beyond the contract price.
Flash Conveyancing Advice:
Get your accountant and conveyancer talking early before you make any major move. Do not make a decision based on yesterday’s tax plan. Before you exchange, make sure you understand your acquisition date, ownership structure, finance position and future strategy.
Julian & Renee are the owners of Flash Conveyancing, specialists in property transactions across NSW. They have extensive experience working with local councils such as Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby and Parramatta, and provide a personalised touch to every settlement, including in Acacia Gardens, Angus, Arndell Park, Blacktown, Colebee, Glendenning, Glenwood, Grantham Farm, Kellyville Ridge, Kings Langley, Marsden Park, Melonba, Oakhurst, Parklea, Quakers Hill, Riverstone, Schofields, Seven Hills, Stanhope Gardens, Tallawong, The Ponds, Baulkham Hills, Beaumont Hills, Bella Vista, Castle Hill, Kellyville, Kenthurst, North Rocks, Northmead, Rouse Hill, Vineyard, Windsor, Annangrove, Box Hill, Cattai, Dural, Gables, Galston, Glenhaven, Glenorie, Maraylya, Middle Dural, Nelson, North Kellyville, Norwest and Winston Hills.
When the tax climate changes, the smartest investors do not panic — they check the contract, the structure and the next move. That is where Julian & Renee at Flash Conveyancing step in. As NSW property transaction specialists, they help buyers and investors move carefully through changing rules, tight settlement dates and local council requirements across Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby and Parramatta. Whether your next decision involves holding a protected investment, reviewing an off-the-plan opportunity, refinancing, transferring ownership or purchasing in areas such as Rouse Hill, Schofields, Marsden Park, Kellyville, Castle Hill, Bella Vista, Riverstone, Box Hill, Norwest, The Ponds, Quakers Hill, Seven Hills, Windsor or Winston Hills, Flash Conveyancing brings local knowledge, clear communication and a personalised approach to every settlement across NSW.