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New Budget Negative Gearing Changes: What Investors Must Do Now
Negative gearing isn’t dead, but the 2026–27 Budget radically changes how it works for established properties. Here’s what’s changing, who’s grandfathered, and what smart investors should do this week.
Key Takeaway
The new Australian Budget keeps full negative gearing for residential properties held before 12 May 2026 and most qualifying new builds, but abolishes wage-offset negative gearing for established dwellings bought from budget night, effective 1 July 2027. Rental losses on these new established properties will be quarantined against rental income only, while commercial property is largely unaffected. Investors should immediately classify each property, re-model cashflow without tax benefits, and adjust borrowing, buffers, and structure before committing to new purchases.
This topic is covered in full on Tailored Loans Sydney
Negative gearing isn’t dead, but the 2026–27 Budget radically changes how it works for established properties. Here’s what’s changing, who’s grandfathered, and what smart investors should do this week.
Read the full guide on tailoredloans.sydneyNegative gearing survives the new Budget, but only in full for existing investments and most new builds. For established residential properties bought from 7:30pm AEST, 12 May 2026, the Budget abolishes wage‑offset negative gearing from 1 July 2027, quarantining those losses to rental income instead of your salary.
In plain English: if you buy an established investment after budget night, you should assume no tax refund from rental losses after 1 July 2027 and make decisions on pre‑tax cashflow.
1. The new negative gearing rules in one page
Here’s the core of the 2026–27 Budget changes, based on the announced measures and draft legislation.
1. Grandfathered properties keep current rules
Residential investments held before 7:30pm AEST on 12 May 2026 can continue to offset net rental losses against other income, subject to existing rules.
2. New established dwellings lose wage-offset negative gearing
For established residential properties purchased at or after budget night, from 1 July 2027 you:
- Cannot offset net rental losses against salary, wages or other non‑rental income.
- Can generally only use losses to offset other rental income or carry them forward.
3. New builds stay favourably treated
Qualifying new residential builds remain negative‑gearing friendly. Investors can still:
- Offset rental losses against other income; and
- Access the 50% CGT discount under current settings (subject to final law details).
4. Commercial and large‑scale structures mostly untouched (for now)
Current announcements suggest commercial property, widely held trusts and institutional housing vehicles are largely outside these specific negative gearing limits, though they’re still hit by broader CGT and trust reforms.
For a bigger-picture view of whether this “kills” property investing, see /insights/will-tighter-negative-gearing-rules-kill-property-investing-reality-check.
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