The 2026 Federal Budget and Property — What You Actually Need to Know
Big news out of Canberra. The government just announced the most significant changes to property investment rules in over 25 years. There's a lot of noise out there right now, so here's the plain-English version — what's changed, what hasn't, and what it means for you.
The short version
Negative gearing on established properties is being restricted. The CGT discount is being replaced. Family trusts are being overhauled. But your existing portfolio is fully protected — and there is still time to act under the current rules.
What's actually changing
1. Negative gearing is being restricted
Negative gearing is when your investment property costs you more than it earns — and you use that loss to reduce the tax on your salary. It's been one of the main reasons Australians have invested in property for decades.
If you sign a contract to buy an established investment property after 7:30pm on 12 May 2026, you can no longer use those losses to offset your wages or other income.
You can still carry your losses forward and use them to offset future rental income from that property. But the immediate tax relief against your salary — which is what made negative gearing so attractive — is gone for new purchases of established homes.
Effective date: 1 July 2027.
Cutoff: Contracts signed before 7:30pm AEST, 12 May 2026 are fully grandfathered — including negative gearing all the way until sale.
2. The capital gains tax discount is being replaced
Since 1999, when you sold an investment property you only paid tax on half the profit. That's the 50% CGT discount — and it's going away.
From 1 July 2027, the 50% discount is replaced with an inflation-based system. You'll adjust your original purchase price for inflation, and only pay tax on the gain above that. There's also a new minimum tax rate of 30% on whatever gain remains.
For most investors — particularly high-income earners who've held property for a long time — this means a larger tax bill when you sell.
Important: This applies to all asset classes — not just property. Shares, ETFs, art, and crypto are all caught by this change. Super and the family home are completely untouched.
3. Family trusts are being overhauled
If you hold assets inside a discretionary family trust, from 1 July 2028 there will be a minimum 30% tax on income held inside the trust — regardless of how distributions are made. The flexibility that has made trusts so attractive for wealth management is being wound back significantly.
Fixed trusts, special disability trusts and charitable trusts are not affected.
What is NOT changing
“Your existing portfolio is fully protected. Anything contracted before 7:30pm on 12 May 2026 is grandfathered — completely.”
This is the most important thing to understand. The government has drawn a clear line. If you own investment property today, nothing changes for you. Keep doing what you're doing.
What remains fully exempt from all changes:
Your family home — completely untouched, and now arguably the most tax-efficient asset in the country.
Your superannuation — unaffected.
New builds — negative gearing is retained, and investors can choose the 50% CGT discount or the new system, whichever gives the better outcome at sale.
Existing portfolios — fully grandfathered under current rules.
The nuance most people are missing
Not every "new" property qualifies for the new build exemption. This matters.
Qualifies as a new build: Off-the-plan apartments, vacant land builds, knock-down-rebuild duplexes.
Does NOT qualify: Extensions to existing homes, single-house rebuilds, properties that have been tenanted for more than 12 months.
If you're considering a new build to retain tax benefits, make sure you're buying a genuinely qualifying property — not just one being marketed as "new."
This is exactly where independent advice matters. We work for you — not the developer. The difference between buying a new build and buying a good new build is the difference between a smart investment and an expensive mistake.
What this means for the Gold Coast
Here's the honest read on what these changes mean locally.
For existing investors: Nothing changes. You are fully protected. Your negative gearing continues, and any gains before July 2027 are still subject to the 50% discount.
For investors thinking about buying: There is a 13-month window — from now until 30 June 2027 — to buy an established property and retain full negative gearing right up to that date. Buying well matters more than it ever has.
For owner-occupiers and first home buyers: Over the longer term, fewer tax incentives for investors in established property means less competition at auction. That's good news for you. But in the short term, the rush to beat the 2027 deadline may push prices up before they settle.
For new build buyers: The clear winner from this budget. If you're open to buying new, the tax treatment is now significantly better than established property — just make sure you're buying into the right project with the right advice.
“Tax was only ever part of the strategy. The backbone is buying well — and that hasn't changed.”
The bottom line
Treasury itself does not expect property prices to fall as a result of these changes. The fundamentals that make the Gold Coast a strong market — lifestyle demand, interstate migration, limited supply in the best suburbs, strong rental yields — are all intact.
What has changed is the urgency for investors sitting on the fence. The clock is ticking toward July 2027, and the rules are better today than they will be in two years.
Speak to your accountant about your specific situation before making any decisions. But if you want to talk through what this means for your property search on the Gold Coast or Northern NSW — I'm happy to have that conversation. No obligation, no pressure.
Oscar Lewis — Buyers Agent, Cohen Handler Gold Coast & Northern NSW