The property investment landscape in Australia could be set for a major shift, following proposed changes to negative gearing and capital gains tax announced in the Federal Budget.
While the reforms are not yet law, they have already prompted many current and future property investors to review their plans, particularly when it comes to buying established homes, purchasing new builds, refinancing, or restructuring existing investment loans.
For investors, the key message is simple: now may be the time to understand how these proposed changes could influence your long-term property and borrowing strategy.
2027 Tax Changes: What Has Been Proposed?
Under the proposed reforms, from 1 July 2027, negative gearing for residential investment properties would largely be limited to new builds. This means investors purchasing eligible new residential properties would still be able to deduct rental losses against other income, while losses from established properties purchased after the relevant cut-off would be treated differently.
The Budget also proposes changes to capital gains tax. From 1 July 2027, the current 50% CGT discount would be replaced by a system based on inflation indexation, with a new 30% minimum tax applying to net capital gains.
Importantly, these changes are still subject to the final legislative process, so investors should avoid making rushed decisions without first seeking professional advice.
Why Existing Investors May See Less Immediate Impact
One of the most important details for current investors is the proposed grandfathering arrangement.
According to the Budget materials, existing arrangements would remain unchanged for properties held before Budget night on 12 May 2026.
This means many current property investors may not see an immediate change to how negative gearing applies to their existing investment property.
However, the proposed changes could still influence future decisions, including whether to:
- hold an existing investment property;
- purchase another investment property;
- refinance or restructure existing lending;
- invest in a new build instead of an established property;
- review long-term capital gains tax outcomes.
Even where existing properties are protected, investors may still benefit from reviewing their overall position with their broker, accountant and financial adviser.
Why New Builds Could Become More Important
A clear focus of the proposed changes is to encourage more investment into newly constructed housing.
Under the proposed rules, investors who purchase eligible new builds would still be able to access negative gearing. They may also have more flexibility when it comes to how capital gains are treated, depending on the final rules that are passed.
This could shift more investor interest toward property types such as:
- off-the-plan apartments;
- house-and-land packages;
- duplexes;
- townhouses;
- newly completed residential developments.
For investors who are planning to buy in the coming years, this could make the type of property they purchase more important than ever.
What This Could Mean for Borrowing Strategy
Tax policy is only one part of a property investment decision. Borrowing capacity, cash flow, interest rates, rental income, loan structure and long-term goals all need to be considered together.
If the proposed reforms proceed, future investors may need to think more carefully about:
- whether an established property or new build better suits their goals;
- how rental losses may be treated;
- whether the loan structure supports long-term cash flow;
- how refinancing could affect their broader strategy;
- whether their investment plans still align with their financial position.
For some investors, the proposed changes may not dramatically alter their plans. For others, they could change the numbers significantly.
That is why it is important to review your lending options before committing to a purchase, rather than relying on assumptions based on the current rules.
Why Investors Are Reassessing Their Plans
There is still uncertainty around how the reforms will play out, including the final details of the legislation and how the market will respond.
However, the conversation around property investment has already changed.
Some investors may be more cautious. Others may start exploring new-build opportunities. Some may choose to hold existing investment properties for longer, while others may use this period to review their loan structure and long-term investment goals.
The most important step is to get clear guidance before making major financial decisions.
Thinking About Buying, Refinancing or Restructuring?
If you are considering buying an investment property, refinancing an existing loan, or reviewing your property lending strategy, the proposed changes are worth understanding.
At Ezi Homeloans, we can help you explore your borrowing options, compare loan structures and understand how different lending strategies may support your property goals.
We recommend speaking with your accountant or tax adviser for personalised tax advice, alongside working with a mortgage broker to review your lending position.
With the right guidance, you can make more informed decisions and prepare for the potential changes ahead.
If you are considering your next move, contact Ezi Homeloansand we’ll help you explore your options.
