Federal Budget 2026: Key Changes To Negative Gearing & CGT Confirmed

Today's Federal Budget confirmed significant changes to Australia’s property investment landscape, with reforms announced to negative gearing and capital gains tax (CGT).

The government says the changes are aimed at improving housing affordability, increasing housing supply and encouraging more investment into new housing construction.

Here are the key announcements:

• Negative gearing concessions will now be limited to new builds

• Existing investment properties will be grandfathered under the current rules

• The flat 50% CGT discount will be abolished. Gains will be adjusted for inflation, meaning tax applies only to the "real" profit above inflation• New legislation surrounding trusts and investment structures has been introduced

• A transition period has been confirmed before the reforms officially commence

What does this mean for property buyers and investors?

The reforms are expected to shift investor demand toward new builds rather than established homes, which could create changing opportunities across the market.

Potential flow-on effects may include:

• Increased demand for new construction

• Reduced investor competition for established properties

• Changes to rental supply and increased rental pricing

• Adjustments to long term investment strategies

• Greater focus on tax planning and ownership structures

For existing investors, the confirmation of grandfathering arrangements means current holdings are expected to retain their existing tax treatment.

For future buyers and investors, these changes may significantly impact the way investment properties are assessed moving forward.

As always, every situation is different. If you’re considering purchasing, investing or reviewing your current lending strategy, now is an important time to seek tailored advice and understand how these reforms may affect your long term goals.

If you’d like help understanding what these changes could mean for your borrowing capacity or investment plans, feel free to reach out.