The Federal Government’s latest Budget has introduced proposed reforms that could significantly reshape Australia’s residential property landscape. The changes to negative gearing and capital gains tax treatment are designed to improve housing affordability and encourage greater investment in new housing supply.
Important: These measures are currently proposed only and are subject to legislation.
What are the changes to negative gearing?
From 1 July 2027, negative gearing tax benefits are proposed to apply only to newly built investment properties.
What does this mean?
This means investors purchasing a new build property would still be able to claim these benefits, while those buying an established property would no longer be able to offset rental losses against their taxable income.
Current investment property owners are expected to remain unaffected.
The aim is to encourage more investment into building new homes, helping increase housing supply and creating more opportunities for home buyers.
It’s important to note that not all new builds are exempt from the new tax reforms. A knockdown rebuild that replaces one older home with a new home will not be considered a new build. A knockdown rebuild that replaces one old home with 2 or more new homes will be considered as a new build as this adds to the housing supply.
What are the changes to Capital Gains Tax?
From 1 July 2027, the current 50% Capital Gains Tax discount is being replaced with an inflation-based indexation model, plus a 30% minimum tax on capital gains.
What does this mean?
Instead of automatically halving your taxable gain, tax will be calculated on your real gain after inflation adjustments.
Important details:
- Applies to gains accruing after 1 July 2027
- Existing gains before that date are protected
- Investors in new builds can choose between the old 50% discount or the new indexed method
These changes alongside the negative gearing changes may encourage more investment into newly built homes and help support increased housing supply.
What does this mean for home buyers?
For buyers looking to build a new home, these proposed changes could create more opportunity.
The Federal Budget is designed to encourage more investment into new housing, which could help increase the number of new homes being built and create greater choice for buyers entering the market.
For many Australians, these changes could make building a new home an even more attractive pathway into home ownership.
If you’re unsure what these new changes could mean for you, talk to your Resolve Finance mortgage broker. They can help you understand your options, access available government grants and concessions, and navigate the home loan process with confidence.
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*Information correct as at 13/05/2026. The budget changes are complex, and legislation may be subject to change. Investors and homeowners should seek professional financial advice. Eligibility at the discretion of state and/or federal government. Please refer to the Government website: www.budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf. Lenders terms and conditions apply. Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence No.385487.