13/05/2026
๐จ ๐ญ๐ฌ๐ซ๐ฌ๐น๐จ๐ณ ๐ฉ๐ผ๐ซ๐ฎ๐ฌ๐ป 2026 โ ๐พ๐ฏ๐จ๐ป ๐ฐ๐ป ๐ด๐ฌ๐จ๐ต๐บ ๐ญ๐ถ๐น ๐ท๐น๐ถ๐ท๐ฌ๐น๐ป๐ ๐ฉ๐ผ๐๐ฌ๐น๐บ & ๐ฐ๐ต๐ฝ๐ฌ๐บ๐ป๐ถ๐น๐บ ๐ก๐
Federal Budget announced some MAJOR proposed changes to:
โ
Negative Gearing
โ
Capital Gains Tax (CGT)
โ
Discretionary Trusts
โ
Housing Infrastructure & Supply
These changes could reshape the Australian property market over the next decade.
Here are the KEY takeaways explained simply ๐
โโโโโโโโโโโโโโโ
๐ 1. ๐ต๐ฌ๐ฎ๐จ๐ป๐ฐ๐ฝ๐ฌ ๐ฎ๐ฌ๐จ๐น๐ฐ๐ต๐ฎ ๐ช๐ฏ๐จ๐ต๐ฎ๐ฌ๐บ
โโโโโโโโโโโโโโโ
๐ Proposed from ๐ญ ๐๐๐น๐ ๐ฎ๐ฌ๐ฎ๐ณ
Negative gearing tax benefits may only apply to newly built properties.
โ Investors purchasing EXISTING established properties after the changes may only offset losses against rental income โ NOT wages.
๐ Losses would carry forward instead.
โ
Existing property owners before the changes are expected to keep current benefits under ๐๐๐ผ๐๐ฟ๐๐ผ๐๐๐๐๐๐๐ rules.
๐ก ๐บ๐ฐ๐ด๐ท๐ณ๐ฌ ๐ฌ๐ฟ๐จ๐ด๐ท๐ณ๐ฌ:
Current system:
โข Investor salary = $120K
โข Property loss = $15K/year
โข Taxable income reduces to $105K
โข Approximate tax benefit = $5Kโ$6K
Under ๐๐๐๐๐๐๐๐
๐๐๐๐๐๐๐:
โ The $15,000 loss CANNOT be offset against wages.
โ
It gets ๐๐๐๐๐๐๐
๐๐๐๐๐๐๐
and can only reduce future rental income or be used when selling.
๐ Tax impact at 37% marginal tax rate:
โก๏ธ Around $5,550 LESS in annual tax savings every year until the property becomes positively geared or sold.
โโโโโโโโโโโโโโโ
๐ 2. ๐ช๐จ๐ท๐ฐ๐ป๐จ๐ณ ๐ฎ๐จ๐ฐ๐ต๐บ ๐ป๐จ๐ฟ (๐ช๐ฎ๐ป) ๐ช๐ฏ๐จ๐ต๐ฎ๐ฌ๐บ
โโโโโโโโโโโโโโโ
๐ The Government plans to replace the current 50% CGT discount with a ๐๐๐ ๐๐๐๐๐๐๐๐๐-๐๐๐
๐๐๐๐
system.
๐ A minimum ๐ฏ๐ฌ% ๐๐ฎ๐
on gains is proposed from ๐ญ ๐๐๐น๐ ๐ฎ๐ฌ๐ฎ๐ณ.
What this means ๐
โ
Gains ๐ฉ๐ฌ๐ญ๐ถ๐น๐ฌ 1 July 2027:
๐๐๐ผ๐๐ฟ๐๐ผ๐๐๐๐๐๐๐ - Still receive the current ๐ฑ๐ฌ% ๐ฑ๐ถ๐๐ฐ๐ผ๐๐ป๐.
โ Gains ๐จ๐ญ๐ป๐ฌ๐น 1 July 2027:
Would move to an ๐๐๐๐๐๐๐๐๐-๐๐๐
๐๐๐๐
๐๐๐๐๐๐ instead of the flat 50% discount.
โโโโโโโโโโโโโโโ
๐ ๐ช๐ฎ๐ป ๐ฌ๐ฟ๐จ๐ด๐ท๐ณ๐ฌ โ ESTABLISHED PROPERTY
โโโโโโโโโโโโโโโ
Investor buys property in 2023 for $800,000
Sells in 2030 for $1,200,000
๐ Total gain = $400,000
Split between:
โข Gains before July 2027
โข Gains after July 2027
โ
Pre-2027 gains:
~$228,000 gain
โก๏ธ 50% discount applies
โก๏ธ Taxable gain = $114,000
โ Post-2027 gains:
~$172,000 gain
โก๏ธ Inflation indexing applies
โก๏ธ Taxable gain = ~$147,000
๐ Under old rules:
Taxable gain โ $200,000
๐ Under proposed rules:
Taxable gain โ $261,000
โ ๏ธ At a 45% tax rate, that could mean:
โก๏ธ Around $27,000 MORE tax on this single sale.
โโโโโโโโโโโโโโโ
๐ฆ 3. ๐ซ๐ฐ๐บ๐ช๐น๐ฌ๐ป๐ฐ๐ถ๐ต๐จ๐น๐ ๐ป๐น๐ผ๐บ๐ป ๐ช๐ฏ๐จ๐ต๐ฎ๐ฌ๐บ
โโโโโโโโโโโโโโโ
๐ From ๐ญ ๐๐๐น๐ ๐ฎ๐ฌ๐ฎ๐ด:
Government plans to introduce a ๐ ๐๐ก๐๐ ๐จ๐ ๐ฏ๐ฌ% ๐๐ฎ๐
on discretionary trusts.
This could heavily impact family trust structures used by property investors.
๐ก ๐ป๐น๐ผ๐บ๐ป ๐ฌ๐ฟ๐จ๐ด๐ท๐ณ๐ฌ:
Property held in family trust
Net rental profit = $60,000
CURRENT SYSTEM:
โข $30K distributed to spouse โ low tax
โข $30K distributed to adult child โ low tax
โ
Total tax โ $11,400
UNDER PROPOSED RULES:
โ Minimum 30% tax applies
โก๏ธ Minimum tax = $18,000
โก๏ธ Extra cost โ $6,600 PER YEAR
โโโโโโโโโโโโโโโ
๐๏ธ 4. ๐ฉ๐ฐ๐ณ๐ณ๐ฐ๐ถ๐ต๐บ ๐ป๐ถ๐พ๐จ๐น๐ซ๐บ ๐ฏ๐ถ๐ผ๐บ๐ฐ๐ต๐ฎ & ๐ฐ๐ต๐ญ๐น๐จ๐บ๐ป๐น๐ผ๐ช๐ป๐ผ๐น๐ฌ
โโโโโโโโโโโโโโโ
Government announced major funding towards:
โ
Roads
โ
Water & sewer infrastructure
โ
Utilities
โ
Housing developments
โ
Faster land releases & planning
๐ More than $8 BILLION expected to be raised from investor & trust tax changes over 5 years.
๐ Around $2 BILLION allocated towards infrastructure to support construction of approximately ๐ฒ๐ฑ,๐ฌ๐ฌ๐ฌ homes over the ๐๐๐๐ ๐
๐๐๐๐
๐.
๐๏ธ Supports infrastructure (roads, water, power, sewerage), ๐ต๐ถ๐ป ๐
๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐๐
โ ๏ธ ๐ต๐ ๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐ + ๐ higher taxes may deter investors
Howeverโฆ
โ ๏ธ Treasury modelling also suggests:
โข ๐ฏ๐๐๐๐ ๐๐๐๐๐ growth may ๐๐๐๐
โข ๐น๐๐๐๐๐ ๐๐๐๐๐๐ could ๐๐๐๐๐๐๐
โข ๐น๐๐๐๐ ๐๐๐๐๐๐๐๐ further
โโโโโโโโโโโโโโโ
๐จโ๐ฉโ๐ง ๐ฏ๐ถ๐พ ๐ป๐ฏ๐ฐ๐บ ๐ด๐จ๐ ๐จ๐ญ๐ญ๐ฌ๐ช๐ป ๐ญ๐ฐ๐น๐บ๐ป ๐ฏ๐ถ๐ด๐ฌ ๐ฉ๐ผ๐๐ฌ๐น๐บ
โโโโโโโโโโโโโโโ
Potential positives:
โ
Less investor competition for some homes
โ
More opportunities to enter the market
โ
Slower growth in some areas
โ
Increased supply over time
BUTโฆ
โ ๏ธ ๐ธ๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐
๐๐๐๐๐๐ ๐๐ ๐๐๐๐๐๐๐ ๐๐๐๐
๐๐๐๐๐๐๐ ๐๐๐ ๐บ๐ป๐ฐ๐ณ๐ณ ๐๐๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐๐ because:
๐ Land is limited
๐ Supply is low
๐ Owner occupier demand remains strong
โโโโโโโโโโโโโโโ
๐ ๐ฏ๐ถ๐พ ๐ป๐ฏ๐ฐ๐บ ๐ด๐จ๐ ๐จ๐ญ๐ญ๐ฌ๐ช๐ป ๐ฐ๐ต๐ฝ๐ฌ๐บ๐ป๐ถ๐น๐บ
โโโโโโโโโโโโโโโ
These changes may shift investor behaviour significantly.
We may see:
โ Less tax-driven investing
โ Lower demand for poor-quality investment stock
โ More focus on fundamentals
โ Greater importance on land value & scarcity
But one thing remains true ๐
๐ก ๐ช๐จ๐ท๐ฐ๐ป๐จ๐ณ ๐ฎ๐จ๐ฐ๐ต๐บ ๐๐๐๐๐
๐๐๐๐๐๐ โ ๐ต๐ถ๐ป ๐๐๐ ๐๐๐๐๐๐๐๐ ๐๐๐๐๐.
A quality property growing:
๐ $150Kโ$300K+ over time
โฆwill almost always ๐๐๐๐๐๐๐๐๐๐ chasing short-term tax deductions.
โโโโโโโโโโโโโโโ
๐ง ๐ป๐ฏ๐ฐ๐บ ๐ช๐น๐ฌ๐จ๐ป๐ฌ๐บ ๐ด๐ถ๐น๐ฌ ๐ถ๐ท๐ท๐ถ๐น๐ป๐ผ๐ต๐ฐ๐ป๐ฐ๐ฌ๐บ ๐ญ๐ถ๐น ๐บ๐ด๐จ๐น๐ป, ๐บ๐ป๐น๐จ๐ป๐ฌ๐ฎ๐ฐ๐ช ๐ฉ๐ผ๐๐ฌ๐น๐บ
โโโโโโโโโโโโโโโ
This market may favour buyers who focus on:
โ
Long-term capital growth
โ
Scarcity & land value
โ
Strong owner occupier appeal
โ
Better quality suburbs
โ
Limited supply locations
โ
Investment fundamentals over tax benefits
Historically, many of ๐จ๐๐๐๐๐๐๐๐โ๐ ๐ฉ๐ฌ๐บ๐ป ๐๐๐๐๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐ were:
๐ก Established houses
๐ In tightly held suburbs
๐ With strong owner occupier demand
๐ Limited supply & scarcity
โnot simply properties purchased for tax deductions.
โโโโโโโโโโโโโโโ
โ ๏ธ ๐ฐ๐ด๐ท๐ถ๐น๐ป๐จ๐ต๐ป ๐ป๐จ๐ฒ๐ฌ๐จ๐พ๐จ๐
โโโโโโโโโโโโโโโ
The โbuy anything for negative gearingโ mindset may become less effective moving forward.
๐๐๐ ๐ฃ๐๐ญ๐ฉ ๐๐๐๐๐๐ ๐ฌ๐๐ก๐ก ๐ง๐๐ฌ๐๐ง๐:
โ๏ธ ๐๐ฉ๐ง๐๐ฉ๐๐๐๐ ๐๐ช๐ฎ๐๐ฃ๐
โ๏ธ ๐ฝ๐๐ฉ๐ฉ๐๐ง ๐ก๐ค๐๐๐ฉ๐๐ค๐ฃ๐จ
โ๏ธ ๐๐๐๐ง๐๐๐ฉ๐ฎ
โ๏ธ ๐๐ค๐ฃ๐-๐ฉ๐๐ง๐ข ๐ฉ๐๐๐ฃ๐ ๐๐ฃ๐
โ๏ธ ๐๐ฉ๐ง๐ค๐ฃ๐ ๐๐ช๐ฃ๐๐๐ข๐๐ฃ๐ฉ๐๐ก๐จ
For many buyers and investors, this could actually create MORE opportunities to secure quality assets while others focus too heavily on short-term tax outcomes.
โโโโโโโโโโโโโโโ
๐ Need help understanding how these changes may impact YOUR strategy?
Whether you are:
๐ก First home buyer
๐ Investor
๐๏ธ Upgrader
We help clients secure quality properties with strong long-term fundamentals and capital growth potential.
Unlock Wealth Property
Your Trusted Buyerโs Advocates
๐ www.unlockwealthproperty.com.au
๐ 0432 297 200
โ ๏ธ Disclaimer:
This is general information only and does not constitute financial, legal or tax advice. Please seek independent professional advice relevant to your circumstances.