Negative Gearing and CGT Are Changing in 2027: Are You Actually Affected?

Since the 2026 Budget I’ve had the same conversation with clients dozens of times, and it usually goes one of three ways.

Some are entirely unaffected and don’t realise it. They’ve spent months worrying about a change that doesn’t reach their property.

Some are materially worse off and haven’t run the numbers. Over a twenty-year hold it’s a meaningful figure, not a rounding error.

And some are about to buy under rules that no longer work the way they assume — the expensive version, because a purchase is hard to undo.

There’s a lot of commentary about these changes and much of it is incomplete. Here’s the plain-language version.

What actually changed?

Two measures from the 2026 Budget take effect on 1 July 2027.

The first limits negative gearing on established residential property. The second replaces the 50% capital gains tax discount with an inflation adjustment.

That second one matters more than most people realise. The 50% discount is a flat halving of your taxable gain regardless of how the asset performed. An inflation adjustment instead strips out the part of your gain that was just inflation and taxes the rest. In a low-inflation period with strong capital growth, that is a materially worse outcome. In a high-inflation period with modest growth, it can be better.

How do I know if my property is affected?

For property you already own, it comes down to one date: 12 May 2026.

If your property was under contract before 7:30pm on that night, the old rules continue to apply to it. If you bought after that, the new rules apply unless the property qualifies as new.

The mistake I see most often is people checking the wrong date. It’s the contract date, not settlement, not when you got finance approved, and not when you moved a tenant in. Go to the contract itself rather than your memory — I’ve now had several clients who were certain, and wrong, in both directions.

If you own more than one property, check each separately. It’s entirely possible to have one property under the old rules and another under the new ones.

I’m planning to buy. Does property still stack up?

For a lot of people, yes — but the decision has changed shape.

What you buy matters more than it used to, because one category of property keeps both concessions. Fewer properties qualify than people assume, and the definition is one of the areas still being finalised, so it needs checking rather than assuming.

How you hold it matters too. Own name, trust, company and self managed super fund now produce more divergent outcomes than they did, and the right answer depends on your income, your other assets and what you’re planning next. There’s also a separate measure still in draft affecting trust distributions, which anyone currently holding property in a trust — or about to set one up — needs to factor in.

And borrowing capacity shifts, because lenders assess serviceability using after-tax position. A change to negative gearing flows directly through to how much you can borrow. That’s often the part that’s missed, because it isn’t a tax question, it’s a finance one.

Want this walked through properly, with the numbers on screen?
Register for the free briefing on Tuesday 13 October →

The 30 June 2027 deadline almost nobody is talking about

This is the part that applies to you even if you don’t own an investment property and never intend to.

Under the new capital gains method, what matters for every asset you already hold is evidence of its value on 30 June 2027.

Not just property. Shares and managed funds. Shares in your own business company. Interests in a family trust. And the goodwill in your business, which is the hardest of the lot to prove after the fact.

If you sell an asset in 2032 and need to establish what it was worth in mid-2027, you want a contemporaneous record, not a retrospective estimate written five years later. The first is evidence. The second is an argument.

That evidence costs very little to assemble now. Later it’s expensive, and in some cases impossible.

What should I do before 1 July 2027?

Three things, in order:

1. Check your contract dates. For every investment property you own, pull the contract and note the date. This single fact determines which set of rules applies, and it takes ten minutes.
2. Plan your 30 June 2027 records. Work out which assets you hold that carry a gain, and what evidence of value you’d want on file for each. For some that’s a market appraisal. For others it’s a share price record or a business valuation.
3. Get advice before you sign anything. If you’re buying in the next eighteen months, the structure and property-type decisions are the ones you can’t easily unwind.

Come to the briefing

I’m running a free 40-minute online briefing to go through all of this properly, with a worked example on a $1 million property held for twenty years so you can see what the change costs in actual dollars rather than in principle.

Property Investment After the 2026 Tax Reforms
Tuesday 13 October 2026, 7:00pm AEDT, online

It’s free, nothing is sold on the night, and questions are answered out loud. If you can’t make the time, register anyway and I’ll send you the written summary.

This article is general information only. It does not take into account your objectives, financial situation or needs, and is not personal tax, financial product, credit or legal advice. Parts of the 2026 reform package, including the proposed treatment of discretionary trust distributions and the definition of a new residential dwelling, remain subject to further legislation or regulation and may change. Obtain advice specific to your circumstances before acting.

Liability limited by a scheme approved under Professional Standards Legislation.