First Home Buyers

YOUR MORTGAGE BROKER PROPERTY INVESTOR INSIGHTS Australia’s Biggest Property Tax Shakeup in 30 Years A complete investor guide to the 2026–27 Federal Budget CGT and negative gearing reforms With real numbers, three case studies, an interactive tax calculator, and eight strategies to protect your wealth. ⏱ 12 min read 📅 June 2026 Edition ⚠️ 2026 Budget Special In This Edition The changes at a glance 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 explained — before and after 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.  There will be changes to pre and post-established properties. Capital gains tax — the new rules with real numbers 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. Case studies — how three investor types are impacted There are number of case studies how the new rules impact your investment.  The CGT impact over time — interactive chart The charts illustrate how the proposed Capital Gains Tax (CGT) changes would increase the tax burden on property investors over time compared with the current rules. Under the existing system, investors receive a 50% CGT discount on assets held for more than 12 months. The approved changes reduce this benefit, resulting in higher tax payable when an investment property is sold. The graphs also provide context on negative gearing, showing the estimated cost to the government in foregone tax revenue each year. While negative gearing allows investors to offset property losses against other income, it represents a significant budget expense. Together, these charts highlight the trade-off between supporting property investment through tax concessions and increasing government revenue through tax reform. The visual comparison helps demonstrate how changes to CGT and negative gearing could affect investors, housing affordability, and government finances over the long term. Smart strategies for 2026 and beyond Pivot to new builds Maximise your principal residence Invest through your SMSF Chase positive cash flow  Carry forward losses strategically  Sell grandfathered properties strategically New builds — the investor’s new best friend Newly built properties may become increasingly attractive to investors if changes to negative gearing and Capital Gains Tax (CGT) rules are introduced. Under some proposed reforms, tax concessions could be retained or enhanced for new housing developments while being reduced for existing properties. This approach aims to encourage investment in additional housing supply, helping to address Australia’s housing shortage. For investors, new builds can offer benefits such as depreciation deductions, lower maintenance costs, modern features that attract tenants, and potential government incentives. As a result, new properties could provide stronger tax advantages and investment opportunities compared with established homes under the proposed policy changes. How the right mortgage structure can help Explained under the following topics: Interest only vs principal and interest Offset accounts to manage cashflow  Separating investment and personal debt  Loan structuring for SMSF property.   Reviewing existing portfolios Overview The changes at a glance 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. 1 July 2027 Changes take effect 12 May 2026 Cut-off for existing rules 2.2 M Property investors in Australia 30% New minimum CGT rate 12 May 2026, 7:30pm AEST — Budget night cut-off Properties under contract before this moment are grandfathered. Old rules apply permanently to these investments. 25th June 2026 — Legislation passed The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 passed both houses of Parliament on 25 June 2026, following a Senate Economics Legislation Committee inquiry that reported on 19 June 2026. The Bill is now awaiting Royal Assent, the final formal step before it becomes law. During debate, the Government also agreed to remove several discretionary ministerial powers that critics — including the Tax Institute, CPA Australia and the FAAA — had flagged as a transparency concern, including the power to expand negative-gearing-eligible property types or CGT-discount asset classes by ministerial instrument alone. Some technical definitions, including what qualifies as a “new build,” are still to be finalised in supporting legislative instruments, so detail in this area may be refined as those instruments are released. Properties held before 7:30pm on 12 May 2026 are fully grandfathered — you keep all existing negative gearing and CGT benefits on those investments indefinitely. Negative gearing Negative gearing: before and after 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. Old rules (pre-12 May 2026) Rental loss offsets wages Immediate income tax saving Applies to all properties No restriction on property type New rules (from 1 Jul 2027) Losses only offset rental income Or future rental capital gains Unused losses carry forward New builds fully exempt Old rules $16,000 loss deducted from $120,000 salary → taxable income $104,000 Tax saving: ~$7,040/yr   New rules $16,000 loss is quarantined and carried forward, it can still be applied immediately against any other residential rental income Sarah has, and any remaining balance reduces her capital gain dollar-for-dollar when she sells (after indexation is calculated). It is