Federal Budget 2026: What the Negative Gearing and CGT Changes Mean for Property Investors.

You have probably seen the headlines about the 2026 federal budget. There is a lot in it.

For property investors in Australia, two things changed: negative gearing on new builds and capital gains tax (CGT).

And if you own or are considering a new build, the picture looks quite different to what most headlines suggest.

Here is a plain-English breakdown of what changed and what it means for negative gearing and CGT on new builds in Australia from 2027.

What changed in the 2026 federal budget for property investors?

The main changes are to negative gearing and capital gains tax, and they come into effect on 1 July 2027. Here are the key facts:

• For properties already bought before Budget night (7:30pm AEST, 12 May 2026), existing negative gearing arrangements stay the same.
• From 1 July 2027, negative gearing will only apply to new builds.
• New build investors get a choice on capital gains tax: keep the current 50% CGT discount or use the new inflation-based method — whichever suits your situation.
• The CGT changes apply across all investments, not just property.
• Your family home and superannuation are not affected by these changes.

What does this mean for negative gearing on new builds in Australia?

New builds came out of this budget in the strongest position of any property type.

From 1 July 2027, new builds are the only property type that will keep negative gearing. That means investors who own or are considering a new build retain access to one of the most significant tax structures available to Australian property investors.

On CGT, new build investors also get flexibility — they can choose between the existing 50% CGT discount or the new inflation-based method, depending on which approach suits their individual circumstances.

What the negative gearing changes mean for properties bought before Budget night

If you already own an investment property purchased before 7:30pm AEST on 12 May 2026, your existing negative gearing arrangements are not affected. The rules that applied when you bought continue to apply.

The changes only affect new purchases from 1 July 2027 onwards — and even then, new builds remain fully eligible.

What should property investors be thinking about now?

Our team has spent this week working through every detail of the budget. The short version is this: if you are thinking about starting or expanding your property portfolio, understanding how these changes interact with your specific situation is the most important step you can take right now.

The changes create a clearer distinction between new builds and existing properties than has ever existed before. For families who have been considering a new build investment, that distinction is worth understanding properly.

We help everyday Australian families understand the property investment landscape clearly, so they can make informed decisions based on their own circumstances.

If you would like to talk through what these budget changes mean for you, send us a message and one of our team will be in touch.