13/05/2026
My thoughts on the proposed Budget changes and what I believe happens next in the property market.
First, here is the simple breakdown.
From 1 July 2027, the government is proposing to limit negative gearing mainly to newly built residential investment properties.
In simple terms, if you buy an established investment property after Budget night, you may no longer be able to offset rental losses against your personal income.
Instead, those losses may only be used against future rental income or residential property gains.
However, existing investment properties held before Budget night are expected to be grandfathered.
That means if you already owned the investment property before the change was announced, you should be able to continue using negative gearing under the current rules for that property.
The CGT changes are slightly different.
The current 50% CGT discount is proposed to be replaced from 1 July 2027 with an inflation-adjusted system and a minimum 30% tax rate on capital gains.
For existing investors, gains made before 1 July 2027 are expected to be protected under the current rules, but future gains after that date may fall under the new CGT system.
So yes, current investors get some protection, but it does not mean every future benefit remains exactly the same forever.
Now here are my thoughts.
Personally, I think too many people are focusing purely on the tax side and not enough on the actual fundamentals of property investing.
The goal should never be:
“How do I pay the least amount of tax?”
The goal should be:
“How do I buy quality assets in locations where demand continues to grow over the long term?”
Because a poor asset with a tax benefit is still a poor asset.
And this is where I think many investors are going to make mistakes.
I believe we are about to see a wave of marketing around:
* House and land packages
* Off-the-plan stock
* Investor-targeted developments
* New-build-only strategies
Some of these will make sense.
Some will not.
Not all new builds are good investments.
Oversupply, poor land value, weak locations, hidden commissions and limited long-term demand can destroy growth potential regardless of the tax benefits.
In my opinion, the strongest opportunities over the next 5 to 10 years in South Australia will still likely come back to the fundamentals:
* Affordable family homes
* Good land content
* Strong rental demand
* Locations close to jobs, transport and infrastructure
* Areas where replacement costs continue to rise
* Homes with future value-add potential
This is why I continue to watch parts of the City of Salisbury and City of Playford very closely.
The City of Playford is forecast to grow strongly over the long term, with population projected to rise from around 116,000 in 2026 to over 183,000 by 2046.
That is a massive population increase.
More people means more demand for housing, rentals, infrastructure, schools, shops and services.
The City of Salisbury is a more established market, so the growth story is different.
It is not projected to grow at the same population pace as Playford, but it has a major advantage: location.
It is closer to the Adelaide CBD, employment hubs, transport corridors, industrial areas and established amenities.
That is why I believe affordable, well-located homes in suburbs such as:
* Paralowie
* Parafield Gardens
* Salisbury Downs
* Salisbury North
* Burton
* Direk
* Brahma Lodge
* Pooraka
* Ingle Farm
* Mawson Lakes
* Munno Para
* Blakeview
* Andrews Farm
* Davoren Park
could continue to see strong demand over time.
Not because every property in these suburbs is automatically a good investment.
But because affordable housing close to services, employment and population growth corridors is becoming harder to replace.
The affordable end of the market may also face more pressure.
If borrowing capacity becomes tighter for some investors, and first-home buyers continue competing in similar price brackets, more people may be pushed into the lower and middle price points.
That could place further pressure on affordable family homes with decent land content.
I also believe rental supply will remain tight.
These policy changes do not magically create enough homes overnight.
Australia still has a housing supply issue, and South Australia is not immune from that.
People still need somewhere to live.
Owner-occupiers need homes.
Renters need homes.
Investors provide a large portion of that rental housing.
So while policy can change the way investors behave, it does not remove the basic demand for shelter.
My view is simple:
* Do not panic.
* Do not buy blindly.
* Do not chase tax benefits over asset quality.
* But also do not sit on the sidelines forever waiting for the perfect moment.
The best investors will adapt.
They will look at:
* Better locations
* Better structures
* Stronger cash flow
* Value-add opportunities
* Secondary dwellings
* Subdivision potential
* Long-term demand
Over the next decade, I believe quality affordable family homes with strong land value in the right Adelaide corridors could outperform many cookie-cutter investor products being sold purely on tax advantages.
Tax rules change.
Markets change.
Governments change.
But strong assets in strong locations will always matter.
Curious to hear everyone’s thoughts on these proposed changes.
Do you think this will genuinely improve housing affordability… or simply shift where and how people invest?
If you’re thinking about buying, investing or trying to understand how these changes could impact your position over the next few years, feel free to reach out for a chat.
This is not financial advice. It is simply my personal opinion from being in the market daily and watching what buyers, renters and investors are actually doing.
