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What the Federal Budget means for property investors

What the Federal Budget means for property investors

The proposed Federal Budget changes to negative gearing and capital gains tax may significantly change how future property investment is structured in Australia.

While the measures are still proposed and subject to legislation, the changes indicate a stronger policy focus on encouraging investment into new housing supply rather than established property. Let’s break it down:

Proposed changes to negative gearing

Under the proposed framework:

  • Existing investment properties and purchases under contract before 12 May 2026 are expected to remain under current negative gearing rules
  • Investors purchasing established property after the proposed changes may no longer be able to offset rental losses against salary or wages
  • Rental losses may instead be carried forward against future rental income or capital gains
  • New builds may retain full negative gearing benefits under the proposed framework

Proposed changes to Capital Gains Tax

From 1 July 2027, proposed changes include:

  • The current 50% CGT discount may be replaced with inflation-based indexation
  • A proposed 30% minimum tax on capital gains
  • Proposed changes would apply across property, shares and trusts
  • Only gains accrued after 1 July 2027 would be affected

The proposed framework may provide more favourable tax treatment for new housing supply compared to established property purchases.

What this could mean for investors

The proposed changes may place greater focus on:

  • New builds and development opportunities
  • Urban infill and projects that increase housing supply
  • Long-term portfolio structuring
  • Cash flow and debt management
  • Timing of asset sales before 1 July 2027

Development and urban infill projects may become a larger part of long-term investment strategies as governments increasingly incentivise the creation of new housing stock.

If you’re looking at a new build, we can help

At JPG, we work with clients across the full development journey, from identifying opportunities and feasibility through to project delivery, sales and long-term investment strategy.

➡️ Take a look at our Development Services.

As always, investors should seek advice from their accountant or financial adviser before making any decisions, particularly as the proposed changes are still subject to legislation. If you would like to discuss development opportunities, investment strategy or property market trends, please contact us.

💡 This information is general in nature only and does not constitute financial or taxation advice. Please seek advice from your accountant or financial adviser before making any decisions.