Negative gearing. Capital gains tax. SMSF loans. If you’ve seen those three phrases in the same headline over the past few weeks and felt a small wave of panic, you’re not alone and you’re in the right place.

Maybe you’ve been googling “negative gearing changes 2026” at 11pm. Maybe you’ve paused a property decision because you’re not sure if the rules are about to shift under you. Either way take a breath. We’ve read the actual Budget papers, so you don’t have to, and broken down exactly what’s changing, who it affects, and (more importantly) who it doesn’t.

The short version: if you already own an investment property, or already have an SMSF loan in place, almost none of this touches you. These changes are mostly about what happens next not what you’ve already done.

Quick summary: what’s actually changing in 2026

• Negative gearing will only apply to new builds from 1 July 2027. Established properties bought after 12 May 2026 lose the ability to offset losses against other income.
• The CGT discount is being replaced with an inflation-indexed method plus a 30% minimum tax rate, from 1 July 2027 for assets sold after that date.
• SMSF property loans (LRBAs) for residential property are being banned for new arrangements from 10 August 2026.
• Existing investors and existing SMSF loans are grandfathered current rules keep applying to what you already hold.

Read on for the full breakdown or jump to does this affect me checklist if you just want the short answer.

1. Negative gearing is being limited to new builds

From 1 July 2027, negative gearing on residential property will only be available for new builds that genuinely add to housing supply think off-the-plan apartments, knock-down rebuilds, or a newly built property that’s been lived in for 12+ months before you buy it.

What this means for established properties: If you purchased an existing property after 7:30pm on 12 May 2026, you won’t be able to offset rental losses against your salary or other income anymore. Those losses aren’t lost they’re quarantined, meaning they can still be carried forward and offset against future rental income or a future capital gain on that same property.

What this means for new builds: Negative gearing still applies as normal, alongside the CGT discount.

Who’s grandfathered (unaffected):

• Anyone who already owned an investment property as at 12 May 2026
• Anyone already under contract before the announcement

If that’s you, current negative gearing rules keep applying for as long as you hold the property. Nothing changes unless you sell and buy again.

2. The CGT discount is being replaced, not scrapped

From 1 July 2027, the 50% capital gains tax discount for individuals was replaced with an inflation-indexed cost base plus a 30% minimum tax rate on the gain.

In practice:

• This only applies to gains on assets sold after 1 July 2027 it’s not retrospective.
• Investors in new builds can choose between the old 50% discount or the new indexed method when they sell, whichever works out better.
• For established properties bought after Budget night, the new method applies.

In plain English: this changes how your profit is taxed when you eventually sell not whether you can buy, hold, or rent out a property today.

3. SMSF property loans (LRBAs) are being banned for new arrangements

We covered this in detail in our [SMSF lending changes post here’s the refresher: from 10 August 2026, new Limited Recourse Borrowing Arrangements (LRBAs) for residential property inside an SMSF will no longer be available.

• Grandfathered: anyone with an existing SMSF property loan already in place.
• Affected: anyone who hasn’t set one up yet and was planning to.

This measure is still working its way through legislation, so details could be refined before it locks in. We’re watching it closely and will update this post as it firms up.

Does this affect you?

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Why this isn’t necessarily bad news

It’s easy to read all this as “the government just made property investing harder.” That’s not quite the full picture.

• Existing investors are protected. If you already hold property or an SMSF loan, nothing is being asked of you.
• New builds just became relatively more attractive. If building or buying off-the-plan was already on your radar, the settings now lean further in your favour — full negative gearing and the CGT discount, potentially for the life of the investment.
• Complexity is where a broker earns their keep. Working out which category a property falls into, whether a purchase should happen before or after a key date, or whether an SMSF strategy still stacks up — that’s what we do every day. You don’t need to become a tax expert. You need one conversation with someone who already understands it.

Frequently asked questions

When do the negative gearing changes start? The new rules apply from 1 July 2027, but the cut-off for established properties is 12 May 2026 (7:30pm) properties bought after that date won’t get negative gearing against other income once the change takes effect.

Will my existing investment property be affected? No. Properties owned (or under contract) as at 12 May 2026 are grandfathered under current rules for as long as you hold them.

What happens to my SMSF property loan? Existing SMSF property loans are grandfathered and unaffected. New residential SMSF loans won’t be available after 10 August 2026.

Is the capital gains tax discount being removed? No, it’s being replaced, not scrapped. From 1 July 2027, a 50% discount is swapped for an inflation-indexed cost base plus a 30% minimum tax rate, applying to assets sold after that date.

Are first home buyers affected by these changes? Not directly. These measures target investors. Expanded first home buyer support, including the 5% deposit scheme and Help to Buy, is running alongside them.

What to do next

If you’re not sure where you land in the table above, or you’ve got a purchase, SMSF strategy, or refinance sitting in the “I’ll get to it” pile now’s a good time to get to it. The goalposts for new decisions are moving, and it pays to know exactly which side of the line you’re on before you commit to anything.

Two ways to get clarity, no pressure attached:

• Click here to access our one-page Budget Impact Checklist
• Book a free chat here and we’ll walk you through whether any of this affects your situation, and what other options may be available to you.

We know “talk to a broker” can feel like a big step when you’re still just trying to understand what changed. So, let’s make it an informal chat and meet you wherever you’re at.

Alissa & Elle

This article is general information only and doesn’t take into account your personal financial situation. The measures described are recent Federal Budget announcements, and some are still progressing through Parliament, so details may change before they’re finalised. Please get in touch or speak with your accountant before making a decision based on this information.