POLICY ANALYSIS
2026 Federal Budget: What Every Australian Landlord Needs to Know
The 2026-27 Federal Budget announced reforms to negative gearing and capital gains tax settings. This APOA briefing explains the landlord impact in practical terms.
Overview
The 2026-27 Federal Budget announced major changes to residential property investment tax settings. The reforms limit negative gearing for established residential properties purchased after the Budget night cut-off and replace the 50 per cent CGT discount with a new indexation and minimum-tax approach from 1 July 2027.
Key dates
- 7:30pm AEST, 12 May 2026: announcement cut-off for grandfathering.
- 1 July 2027: new rules are scheduled to apply.
- Existing properties: properties held before the cut-off are exempt from the negative gearing changes.
Negative gearing
Under the announced reform, rental losses on affected established residential properties can no longer be used to reduce unrelated income such as salary and wages. Instead, losses are generally limited to residential rental income or relevant future capital gains, with carry-forward treatment where applicable.
Capital gains tax
The Budget material says the government will replace the 50 per cent CGT discount with a discount based on inflation and introduce a 30 per cent minimum tax on gains from 1 July 2027. The final practical impact will depend on legislation, asset timing and individual tax circumstances.
New builds
The reform is designed to steer tax support toward new supply. Investors considering purchases should carefully check whether a property qualifies as a new residential property, and should not rely on marketing language alone.
What landlords should do now
- Keep contract and settlement records for existing investment properties.
- Ask your accountant to model any new purchase under the announced rules.
- Compare established property and new-build scenarios using after-tax cash flow, not headline rent alone.
- Track legislation because details may change before commencement.
APOA view
The changes are significant and deserve calm analysis. The goal of improving affordability is important, but rental supply also matters. APOA will continue to explain the policy in practical language and collect landlord experience as the legislation develops.
Official references
Disclaimer
This article is general information only and does not constitute legal, financial, tax, or investment advice. Please seek qualified professional advice and check current official guidance for your circumstances.