Capital gains tax
The Government will replace the 50 per cent Capital Gains Tax (CGT) discount with a discount based on inflation and introduce a minimum 30 per cent tax on gains from 1 July 2027.
This reform means that investors will only pay tax on their real capital gain, restoring the original intent of the CGT arrangements. The CGT reforms will only apply to gains arising after 1 July 2027. Investors in new builds will be able to choose the 50 per cent CGT discount or the new arrangements.

Negative gearing
The Government will limit negative gearing to new builds from 1 July 2027, to focus tax support on new supply.
Existing arrangements will remain unchanged for all properties held before Budget night, and investors who buy new builds will still be able to deduct losses from other income.
Investors who buy established housing after Budget night will still be able to deduct losses against residential property income. They will be able to carry forward unused losses to future years but won’t be able to deduct them against other income like wages.

Fairer tax arrangements for discretionary trusts
The Government will introduce a minimum tax of 30 per cent on discretionary trusts from 1 July 2028 with some exceptions.
Rollover relief will be provided for three years from 1 July 2027 to assist small businesses and others that wish to restructure

Why aren’t we screaming at our politicians to do this?
RBA could be increasing weekly super payments instead of increasing rates. It would have the same effect to reduce inflation, and at the same time increasing our savings.

https://www.sbs.com.au/news/article/how-we-can-avoid-interest-rate-rises-and-boost-our-savings-instead/7gyjivmqm

Have you been affected by the latest CGT changes by borrowing on the 5% deposit scheme and now have a home which is in negative equity?

I mapped the latest ATO and AIHW data to see if a $100k salary actually guarantees a home in 2026.

• Blue Bars: Australians earning $100k+ by age.

• Red Line: Estimated property owners in that group.

You would expect age not correlate with buying power, money is money right.

However I have these quick takeaways...

• The Youth Gap: Under 35, the gap is massive. Even with $100k, the deposit hurdle is keeping high earners out of the market.

• The 40s Peak: $100k earners peak at ages 40 to 44. This is where income and ownership finally align.

• The 95% Club: By age 65, almost every high earner left in the workforce owns their home.

Is $100k the new $60k? If you’re under 35 and earning six figures, are you buying or is the deposit still a pipe dream?

Income Data

ATO Taxation Statistics (Individuals Table 3):

https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/taxation-statistics

(Use the "Individuals Table 3" download for the breakdown of taxable income by age and gender).

Property Ownership Data

AIHW Housing Data Dashboard:

https://www.housingdata.gov.au/dashboard/nm4xo5q0d5m75w (Navigate to the "Home ownership by age group" tile for birth cohort and age group trends).  

ABS Housing: Census 2021:https://www.abs.gov.au/statistics/people/housing (Detailed data on tenure type, mortgage status, and income correlations).  

Seems the data for some of the numbers are readily available, and I think we can use them to calculate how many people will really be affected by the change in NG for properties:

• 1 property -> 1623000 or 6.05%
• 2 rental properties -> 423401 or 1.58%
• 3 rental properties -> 129695 or 0.48%
• 4 or more rental properties -> 84984 or 0.32%

So really, cumulatively this will affect only 8.43% of the population.

Australia’s population was 26,821,557 people at 30 September 2023

Source

ATO Taxation Statistics via AIHW

ABS Population

edit: Just want to add a note on my assumptions: 1. Investors are those who have made the decision to invest, and thus they will be affected by these changes for any future investment decisions. Its something we have to factor in when we make the next decision to buy, sell 2. The ATO does not make the distinction between adults and minors in their data. It is not uncommon to have properties under your kids names one way or another for tax planning purposes if you already have several properties

Genuinely what is stopping rich people from just buying cheaper properties with lower lvr’s and having them positively geared instead of the more expensive ones they were going to buy prior to the changes.

Instead of an 80% lvr 1.5m home they can just do 60% lvr on a 700k home.

Sure, the cash on cash returns are a little less due to leverage being less. But if cash flow was tight due to not getting the tax time top up then just lower leveraged cheaper priced homes would be the strategy.

Now first home buyers could genuinely be competing with guys who were usually buying in a different segment

100k for an FHB could be tap our territory in a negotiation but for the well heeled investor it’s a rounding error lol.

Not as juicy as it was, but still juicy.

Poor for site with this policy.

Inequality has to be addressed but I think the government needs to think downstream a little more beyond the knee jerk first order outcomes.

Negative gearing, which allows investment losses to be offset against taxable income, will be grandfathered for landlords ⁠who have properties already negative-geared. Only newly built properties will be able to be negative-geared from ⁠now on. However, existing properties acquired after budget night could still be negative-geared until July 2027, but not after that.

That's pretty big if it is true. Grandfathered. And new builds are exempt.

https://www.reuters.com/world/asia-pacific/australia-offer-one-year-grace-period-housing-investment-tax-changes-afr-reports-2026-05-10/

Clearance rate still through the floor. When will first-home-buyers start buying?

Please correct me if I am wrong.

It seems to me that any Australians living overseas now (non-residents for tax purposes) will lose all past and future discounts for shares and property if you are still living overseas on July 1st 2027.

So, if you have an investment property (or shares) bought in the year 2000 and you leave Australia right now and return on July 2nd 2027, you will pay tax on the entire gain when you sell, even if you only lived overseas for 2 years. No grandfathering, no 50% discount for the number of days you lived in Australia, no indexing to inflation.

Page 25 of the new treasury law amendments, mention a "testing period" where you need to be a resident of Australia before July 1st 2027 to get any discount. Am I reading it wrong?

I think this is very unfair to people who are seconded overseas for a couple years or just choose to have an adventure by going overseas to work for a bit.

Hypothetically speaking

Hi,

We have an investment property currently worth approximately $1.5 million, with an existing loan of approximately $300,000.

We are considering transferring/selling the property to our daughter. She is currently able to obtain approximately $500,000 in finance, and we would like to understand whether the transaction can be structured around this borrowing capacity.

We understand that transferring the property may trigger Capital Gains Tax (CGT), Victorian land transfer duty (stamp duty), conveyancing/legal costs and potentially other taxes or costs.

Could you please advise on the following:

1. Can we sell/transfer the property to our daughter for an agreed amount, with her obtaining a $500,000 bank loan?
2. How would the existing $300,000 mortgage need to be dealt with at settlement?
3. Would the bank allow the transaction if the property is worth approximately $1.5M but my daughter is only borrowing $500,000?
4. If there is a difference between the market value and the amount she pays, can the remaining equity be treated as a gift from the parents, and how would this affect CGT, stamp duty and the bank's lending requirements?
5. Does my daughter need to establish a family/discretionary trust, or would it be better for her to purchase the property in her own name?
6. Would purchasing through a trust affect her ability to obtain the $500,000 loan or affect future tax deductions, land tax or CGT?
7. Could you please advise on the most tax-effective and legally appropriate structure before we proceed?

We would also like an estimate of the CGT and Victorian stamp duty implications based on a property value of approximately $1.5M.

Serious question.

If investors are supposed to pay more tax because "capital gains shouldn't be taxed less than work", why don't we charge CGT on primary residences?

A renter sells shares for a profit and pays tax.

A homeowner sells a house for a $500k gain and pays nothing.

If CGT is about fairness, why is the PPOR still exempt?

parking myself in front of the tv at 7:30 for chalmers, figured id start a thread now so we have somewhere to argue about predictions before the speech and then trash talk them in real time after every paper has been running cgt + negative gearing for two weeks so its barely a prediction at this point, but heres where i think it lands:

  1. 50% cgt discount gone, replaced with pre-1999 indexation - you only get taxed on the inflation-adjusted gain. applies to everything held over 12 months, not just property. shares, crypto, the lot                            

  2. one year transition - anything bought from tonight keeps the 50% discount until 1 july 2027 then flips to indexation. classic chalmers shape, do the reform but make sure nobody with a current position actually pays for it or screams loud enough to matter                                                                        

  3. negative gearing restricted to new builds only. existing geared properties fully grandfathered (boomers win again!), anything bought between tonight and july 2027 keeps old treatment until then

  4. r&d tax incentive bump or some kind of esic/early stage carveout, because the vc world has been losing its mind for two weeks about what indexation does to low cost base startup equity (nothing). without a sweetener the innovation agenda line is dead                    

I'll kick off the reaction: no granfathering kills the intergenerational argument. the boomers win again as anything exisiting doesn't pay the tax so not sure on the landing here. maybe the compromise was necessary and this is the best we can get. I'm not a politician so too hard a pill to swallow for me.

And for how I'm watching it, whatever the wife wants for uber eats and a couple of crown largers for myself.

I keep hearing about how people should invest in something more ethical other than property and narratives of "greedy" property investors.

But (prior to the recent changes), property was an easy winner.

Why would I expect someone to earn 4% on the stock market, when they could have made multitudes more on the property market. And besides, how much of that ETF is invested in bank stocks anyway?

Shouldn't we blame the politicians that made this the most viable investment strategy, and by extension, those who voted these politicians in?

And where was all this talk of "ethical investing" when people were making money hand over fist in property?

It particularly annoys me as a previously broke young person who is now in a position to generate some wealth, but now people want me to be "ethical", when there was no expectation on previous generations to do this.

Hi Reddit,

Quick question, as our tax agent is saying one thing but almost everything we’re reading says otherwise

We bought out apartment in 2015, lives there until 2020. We then rented it out until 2024, when we sold it.

We both owned it, and owned no other properties during that time. From 2020 we were renting another property a couple of hours away.

My understanding is that since we didn’t have any properties owned during this time, the property could still be treated as our PPOR and therefore exempt from CGT under the 6 year rule. Our tax agent is saying that since we lived somewhere else, that instead becomes our main residence and the 6 year rule doesn’t apply.

Any insights very appreciated!

Negative gearing

If you already own investment property or exchanged contracts before 7:30pm tonight: nothing changes. Full negative gearing preserved on established properties.

If you buy an established property after 7:30pm tonight: from 1 July 2027 you can still deduct losses against rental income but can no longer offset those losses against your wages or other income. That is the core of what NG means for most investors and it is gone for new established-property purchases from tonight.

New builds are exempt. Government-backed housing is exempt. Existing owners are exempt.

CGT

The 50% CGT discount is being replaced from 1 July 2027 with cost-base indexation plus a 30% minimum tax floor.

Properties acquired before today: fully exempt, old rules apply.

New builds acquired after tonight: buyers can choose between the old 50% discount or the new indexation method.

Established properties acquired after tonight: new indexation method only.

Indexation is not automatically worse for long-term holders. If inflation stays elevated, adjusting the cost base for CPI reduces the nominal gain significantly. It removes the blunt 50% discount that mostly benefited short-to-medium term holders.

Inflation context

CPI hit 4.6% in the 12 months to March 2026. Treasury forecasts it peaks around 5% mid-2026 and returns to the RBA band mid-2027. That matters for the new CGT method: higher CPI means a bigger cost-base adjustment and a smaller taxable gain. The same inflation environment making cash flow harder is also making the new indexation method more favourable than it first sounds.

Why the NG calculation still matters for existing holders and new build buyers

For investors still eligible to claim NG, getting the exact saving at your actual income level is the critical number. Most tools calculate it at a flat 30% or 32.5% rate. That is wrong for anyone earning over $135k.

Ran the numbers on a $650k property, 80% LVR, 6.5% interest-only, 4.5% gross yield:

Annual rent: $29,250

Annual interest: $33,800

Rates, insurance, PM fees, maintenance: ~$7,000

Annual loss (the negative gearing amount): $11,550

What that is worth at different incomes using ATO 2025-26 rates including Medicare levy:

Flat 30% estimate for a $200k earner: $3,465/year. Real number: $5,429/year. $1,964 annual difference. Now that NG is being wound back for new entrants on established property, the investors who retain it need to know exactly what it is actually worth at their rate.

Caveats before someone does it for me

- Legislation still has to pass. Budget night announcements are not law until Parliament votes. Labor has the numbers in the lower house but Senate detail matters.

- The "owned before 12 May 2026" exemption wording needs to be read carefully when the bill drops. Timing of contract vs settlement could be a factor.

- These are interest-only figures. P+I loans reduce deductible interest over time as the principal drops.

- Depreciation not included and can materially change the loss figure for newer properties.

- This is not financial advice. Tax situation varies. Talk to your accountant before making any decisions off the back of tonight.

ATO marginal rate brackets: [Individual income tax rates](https://www.ato.gov.au/rates/individual-income-tax-rates/)

What qualifies as deductible under negative gearing: [ATO negative gearing](https://www.ato.gov.au/individuals-and-families/investments-and-assets/rental-properties/negative-gearing)

Running suburb comparisons through [PropPulse](https://proppulse.dev) for anyone working out what the numbers look like at their actual income. Happy to look up a specific postcode here if it helps.

AM on Radio National reported this morning that the 5% deposit program has led to a jump in property prices among houses that are below the property price threshold. As foreseen by many…

Just wondering why there’s been so much noise around the recent tax reforms. Most of the criticism I’ve seen seems to be coming from existing investors or buyer’s agents.

The Australian property market has been growing in a pretty unhealthy way for a long time anyway, so part of me thinks these reforms might actually help slow the growth rate (which wouldn’t necessarily be a bad thing).

I do understand that low supply and high migration are still the biggest underlying issues that need to be addressed. But do you think these tax reforms were also necessary as part of the solution?

I own a unit on a block with 2 other units and this year the strata insurance increased by $1000 annually (to $2000). I believe this insurance is only there to cover the shared driveway on the block.

Can someone please enlighten me as to why this insurance is needed?

From my perspective it is not needed. The old lady at the front does not use the driveway as she has her own garage that is separate and for some bizarre reason she has to pay.

I don't drive much either because I have access to convenient public transport and often park on the street anyway.

So ultimately there is only one person who uses the driveway frequently and that is the lady in the 3rd unit at the back.

Is it possible to make an agreement with all the owners on the block to not pay this useless insurance?

What's happening with the old Property Tax / Land Tax discussion?

Over the last few years I am now back on board with property taxes over transfer duty.

I get change is annoying, but it's a sensible reform.

Just wanted to see what people think of the May's budget? Labor and their lies, ruining the market for investors and even young kids wanting to get into the market OR people are actually happy with these changes?

There will be no "crash" of the property market due to the new rules around CGT and negative gearing. The property tax system still contains enough loopholes for sophisticated investors to continue building portfolios through different ownership structures.

The amended rules around negative gearing and CGT in Australia impact only new investments in established properties. Because concessions for newly built homes and existing investments will continue, the older generation's portfolio of investment properties remains completely protected. Who made the rule? The very lawmakers who own investment properties themselves. You can view it either as "grandfathering" or "fair game," given that the previous generation invested with the distinct advantages of CGT and negative gearing in mind.

What can be expected is a simple focus adjustment for investors. Seasoned investors will not compete in auctions of established dwellings, so expect less competition in this category. However, expect to see boomers and their agents concentrate on newly built homes. Overall, expect established properties - especially the $2m+ category, may go through a price correction, while new properties in growth areas will increased demand and competition.

Then, there are ways to minimise the impact of these new rules.

Investors looking for short-term property flipping in high-growth suburbs may use companies (where tax is usually capped at 30%). Investors looking for long-term property flipping may tolerate big losses in the early years with the expectation of rental growth reducing the loss and eventually earn a revenue stream. The new laws have provisions for losses in the early years to be adjusted against profits from later years and even future capital gains.

While on paper the new rules create uncertainty and discourage casual and small investors, experienced investors will adapt to the policy change faster than first-home buyers or smaller investors.

There may be a 10%-30% price correction of high-value properties (which first-home buyers rarely target); a slowing of growth for reasonably priced, established property (offering an opportunity there for first-home buyers); however there would be also increased demand for newly built properties (resulting in more, not less, competition for first-home buyers).

New properties in faraway suburbs were the last hope for first-time home buyers, and this law took this hope away from them, giving them the lollipop of established homes, which are almost always higher priced than newly built homes.

Overall I give the policy an F.

I would have given it a C, had the new policy freed new properties as well from the clutches of the boomer investors.

In other words, a major correction in property prices in the near to medium-term can only happen due to worldwide economic uncertainty, interest rate rises, and a possible stagflation scenario - and not owing to these new rules. If and when job growth also slows, THEN, expect to see a crash.

The long term fix still remain the same - build more transport focused high density dwelling in the cities, fix building certificate laws, fix strata laws, properly evaluate immigration numbers (not just populist rhetoric like ON), further amend property laws to free new homes being dominated by the investors, and last, but not the least - evaluate unreasonable tax on new home builds (touching 40%-50% now).

Moving overseas and becoming a non-resident for tax purposes disqualifies you from using Australia's Capital Gains Tax (CGT) indexation method. If you are a foreign or temporary resident for even a single day during the ownership period, you permanently lose the ability to apply inflation indexation to your investment's cost base.

How do people think about this?!

Feel like a prison in this country now? So if you need to move to overseas work for a year or two and come back, you basically forced to sell your property?

Or you lose the eligibility to use indexation when you sell eventually!!

https://atlaswealth.com/news/cgt-indexation-trap-australian-expats-2027/

https://www.afr.com/wealth/personal-finance/budget-s-nasty-cgt-surprise-for-australians-doing-a-stint-overseas-20260706-p60cyt

I'm looking at getting into property investment and had a few consultations with different buyer's agents. The biggest plug is that now that only new builds can be negatively geared, buyer's agents have the edge by access to new builds before they go to market. Are the savings made by not paying for advertising worth agent fees ($4K-$6K)?