If you held a residential investment property at 7:30pm AEST on 12 May 2026, you can keep negatively gearing it in future years until you sell it. Its capital gain is split at 1 July 2027, with the 50% discount on the part before that date.
Most of the questions we hear from existing owners are about this cut-off. Here is what the Budget explainer says.
Who counts as "held"
The government says properties "held at announcement (including where a contract has been entered into, but not yet settled) will be allowed to be negatively geared in future years until sold." The announcement time is 7:30pm AEST on 12 May 2026, the start of the Budget speech.
So the date that matters is the date you signed the contract, not the settlement date. Find your contract and check it.
What stays the same for you
- Rental losses on that property can keep reducing tax on your other income, such as your wage, until you sell.
- The part of any gain made up to 1 July 2027 keeps the 50% discount.
- Your home stays exempt from capital gains tax.
What changes for you
- The part of the gain made after 1 July 2027 is taxed with indexation and the 30% minimum. See The CGT discount is changing.
- When you sell, you will need the property's value at 1 July 2027, from a valuation or the ATO's apportionment formula.
- If you buy another established property, its losses from 1 July 2027 can only offset residential property income. A new build keeps the current rules. See Why new builds are treated differently.
Things the explainer does not cover
The Budget explainer does not say how refinancing, a change of use (for example moving into the property) or a transfer between family members is treated. If any of these is on your horizon, ask your accountant before you act, because getting it wrong could cost you the old treatment.
Thinking about a second property?
Many existing owners use the equity in what they own to fund a deposit. How that works, and why the lender decides how much you can use, is in Using equity to buy your next investment property.
What changed for property investors in 2026.Get the free guide
Southern River, WA
Common questions
I signed on 10 May 2026 and settled in June. Am I covered?
The explainer says a contract entered into before the announcement counts as held, even if it settled later. Your accountant confirms your case.
I bought on 1 June 2026. What happens?
Properties bought between the announcement and 30 June 2027 can be negatively geared during that period, but not from 1 July 2027, unless they are new builds.
Do I need a valuation now?
Not now. The value at 1 July 2027 is worked out in the tax return for the year you sell. Some owners may choose a valuation near that date; ask your accountant.
Does selling and buying again keep my position?
No. The old treatment lasts until that property is sold. A new purchase follows the rules for its own purchase date and type.
General information only. It does not take your personal circumstances into account. Your accountant confirms how these changes apply to you.
