Negative gearing and CGT after the 2026 budget

The new rules begin on 1 July 2027. Until then, the current negative gearing and 50% CGT discount rules continue to apply. Property contracts entered before 7:30pm AEST on 12 May 2026 are grandfathered for negative gearing indefinitely.

For negative gearing: no, if you contracted to buy before 7:30pm AEST on 12 May 2026 you’re grandfathered indefinitely. For CGT: partially. Gains accrued before 1 July 2027 keep the 50% discount. Gains accrued after that date face the new regime (CPI cost-base indexation plus a 30% minimum tax on real gains), regardless of when you bought.

Your current borrowing power is calculated against today’s tax framework. The new rules take effect from 1 July 2027, but lenders may start updating their serviceability calculators ahead of that date - which could affect your borrowing power or pre-approval on new applications. Approvals issued under today’s rules don’t change retroactively. From 1 July 2027 onwards, a post-budget established purchase will service differently from a new build or a grandfathered property. The order you place loans across lenders (covered in the lender sequencing post) matters more than ever under the new rules.

No. Mortgage interest rates are set by the Reserve Bank’s cash rate decisions and individual lender pricing, not by federal budget tax measures. The 2026 budget changes affect how your after-tax cashflow on a rental property is calculated (negative gearing, CGT) - which from 1 July 2027 can shift your borrowing capacity. But the rate on your loan itself is unaffected by the budget.

This is a tax and strategy question for your accountant and adviser, not a broker decision. Two structural observations: For established property: buying before 1 July 2027 lets you accrue some pre-2027 gains under the existing 50% CGT discount, but doesn’t restore negative gearing grandfathering - that ended on 12 May 2026 budget night. For new builds: there’s no time pressure. New build investors keep both full negative gearing and the CGT election at sale regardless of when they buy. Whether either matters for your situation depends on your goals, timing and serviceability.

The cut-off is based on contract date, not settlement date. If you signed a contract before 7:30pm AEST on 12 May 2026, you’re grandfathered for negative gearing even if settlement happens later. The official Treasury fact sheet (PDF) confirms the contract-date trigger.

Negative gearing on new builds remains fully deductible against any income, with no sunset date currently legislated. For CGT, new-build investors get an election at sale: pick the existing 50% discount or the new indexation plus 30% regime, whichever delivers the better result.

Negative gearing restrictions: don’t apply to widely held trusts, superannuation funds, build-to-rent developments, government housing programs, or commercial property - all carved out. CGT: super fund CGT discount treatment is unchanged per Treasury. Trust and entity-level CGT treatment varies by structure. Your accountant is the right person to talk to about specific entity treatments.

If your existing loans are cross-collateralised, the structural decisions become more important under the new rules - selling, refinancing or releasing equity from a tangled security pool gets harder when the tax treatment splits across cohorts. The cross-collateralisation post covers the implications; the lazy equity post covers how to release equity cleanly for the next purchase.

Yes, particularly if you’re planning to refinance, considering an equity release for the next purchase, holding a portfolio with cross-collateralised loans, or weighing whether to buy more before 1 July 2027. Property bought before budget night gives you grandfathering to work with. Property bought after has different borrowing arithmetic from 1 July 2027. Reviewing the loan structure now lets you plan around the change instead of reacting to it.