Property Tax · Legislated 25 June 2026

Negative gearing ends for new property purchases, CGT discount replaced from 2027

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Keep an eye on it

Anyone who bought or plans to buy an investment property after 12 May 2026 faces fundamentally different tax rules from 1 July 2027. Existing owners are grandfathered.

In a nutshell: The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 passed the Senate on 25 June. Negative gearing on established residential properties bought after 7:30pm 12 May 2026 will be abolished from 1 July 2027. The 50% CGT discount will be replaced by cost-base indexation; a 30% minimum CGT rate applies from 1 July 2027 (on gains accruing after that date). New builds remain exempt from negative gearing changes.

Spin Unspin

What they’re saying

Government frames reform as supply-side housing fix; omits that grandfathering existing investors limits near-term affordability impact.

Government conceded the point and announced an Innovative Business CGT Concession on 18 June for founders, employees in ESS and early-stage investors.

ATO, Baker McKenzie and William Buck all confirm the bill passed and detail the grandfathering rules. Government budget factsheet corroborates the policy intent.

Tax reform – Boosting home ownership – Reforming negative gearing and capital gains tax | Australian Taxation Office

Australia: Major Changes to CGT and Negative Gearing | Insight | Baker McKenzie

Federal Budget Analysis 2026 | Negative gearing - William Buck Australia

Do I care?

Confirm with your accountant whether your contract date or settlement date determines grandfathering; the distinction is material.

New builds retain both negative gearing and the existing CGT discount; established properties do not from July 2027. Model both scenarios.

If you hold investment property or are considering buying one, a conversation with a tax adviser is worth the fee.

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