The 2026-27 Federal Budget changed the rules on negative gearing. The changes are now law and start on 1 July 2027.
If you already own an investment property, the good news is that not much changes for you. If you’re planning to buy one, it’s worth knowing how the new rules work before you do.
Building wealth through property isn’t about owning as many properties as possible. It’s about having enough of the right ones.
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What is negative gearing?
A property is negatively geared when the costs of owning it, like loan interest and maintenance, are more than the rent it earns. Until now, investors could claim that loss against their salary to reduce their tax.
What’s changing?
From 1 July 2027, if you buy an established investment property after Budget night (12 May 2026), you can no longer claim its losses against your salary. You can still use those losses against rental income from other properties, or carry them forward.
Here’s how it plays out:
- Already own an investment property? You can keep negatively gearing it under the current rules.
- Buying a new build? You can still negatively gear it against your salary.
- Buying an established property? The losses can only be used against property income from 1 July 2027.
The Budget also changed capital gains tax on investments from 1 July 2027, which is worth discussing with your accountant.
What counts as a new build?
A new build needs to add to housing supply. That includes new off-the-plan apartments, homes built on vacant land and knockdown-rebuilds where the land is subdivided into more homes. Renovating or replacing one house with another generally won’t count.
Is property investment still worth it?
For many investors, yes. But the numbers matter more than they did before.
With less tax relief on established properties, rental yield, cash flow and long-term growth carry more weight. A property that only works because of the tax deduction may no longer be the right fit.
You don’t need every property. You need the right ones.
All you need is enough. Talk to an Inovayt property investment specialist about what the changes mean for your next move.
FAQs
When do the negative gearing changes start?
The changes apply from 1 July 2027, for residential properties bought after 7:30pm AEST on 12 May 2026.
Can I still negatively gear my existing investment property?
Yes. Properties held before Budget night aren’t affected.
Can I still negatively gear a new build?
Yes. New builds that add to housing supply can still be negatively geared against your other income.
Sources
- ATO: Reforming negative gearing and capital gains tax (updated 29 June 2026)
- Budget 2026–27: Tax reform
