On 12 May 2026 at 7:30pm AEST, the Federal Government’s 2026–27 Budget fundamentally altered the landscape for Australian property investors. Two pillars of property investment tax strategy — negative gearing and the 50% capital gains tax discount — are being significantly wound back. Here’s what’s changing, when, and for whom.

Negative gearing occurs when your investment property’s costs — mortgage interest, rates, insurance, maintenance, depreciation — exceed the rent you collect, producing a net rental loss. Under the old rules, this loss could be deducted against any income source, including your salary, cutting your tax bill immediately. After the Budget is approved by Parliament, there will be changes to pre and post-established properties.

The current 50% CGT discount means investors only pay tax on half their capital gain when they sell a property held for more than 12 months. From 1 July 2027, this discount is replaced with two new mechanisms that work together.

Number of case studies how the new rules impact your investment. 

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