Australia's 2026 property tax changes, explained

Today, if your rental property runs at a loss - rent minus interest, expenses and depreciation comes out negative - you can deduct that net loss against your salary and other income, reducing your overall tax bill. That is negative gearing.

Under the law, from 1 July 2027 net rental losses on established (existing, not new) residential dwellings acquired on or after 7:30pm AEST on 12 May 2026 are quarantined. A quarantined loss can only be deducted against your residential rental income or your residential capital gains - not against your salary, wages or other income. Any unused loss carries forward to future years and can offset future rental income or gains.

Two more points worth holding onto. First, new dwellings are unaffected - buy a brand-new property and the existing negative-gearing rules continue to apply. Second, this targets the moment of acquisition: it is the purchase date relative to 7:30pm on 12 May 2026 that decides whether an established rental falls under the old rules or the new ones.

This measure is now law (Royal Assent 26 June 2026) but does not start until 1 July 2027 - nothing changes for your negative gearing before then.

Today, individuals who hold an asset for more than 12 months pay capital gains tax on only half the gain - the flat 50% CGT discount. Under the law, from 1 July 2027 that flat discount is replaced by two things working together:

• Inflation (CPI) indexation of your cost base - so only the real, above-inflation part of your gain is taxed. The slice of the gain that just kept pace with inflation is effectively removed.
• A minimum 30% tax applied to the gain.

Crucially, this applies to gains that accrue after 1 July 2027. Any gain that built up before that date keeps the current 50%-discount rules. In practice that means your future CGT could be split: the pre-1-July-2027 portion under today's rules, and the portion after under the new indexation-plus-minimum-tax approach.

This measure is now law (Royal Assent 26 June 2026) but does not start until 1 July 2027 - your CGT discount is unaffected before then.

Two more measures sit alongside the property changes. They are not property-specific, but they matter to investors who hold property inside a self-managed super fund (SMSF) or through a trust.

Super: from 1 July 2026, super balances over $3 million are taxed an extra 30% on realised earnings - this measure is now law and already in effect. At the same time the Low Income Superannuation Tax Offset (LISTO) rises by $500 to $810, and its income threshold lifts from $37,000 to $45,000.

Trusts: from 1 July 2028, a 30% minimum tax is proposed on discretionary trust distributions. If you hold investment property through a discretionary (family) trust, this is the measure to keep an eye on.

The super measure is now law and in effect. The trust measure remains proposed and has not passed Parliament.

Nothing here demands a rushed decision - the negative-gearing and CGT changes are now law but still over a year away from taking effect. But a few sensible, general steps put you in a strong position whatever happens.

• Know your purchase date. For negative gearing, whether you owned each property before or after 7:30pm on 12 May 2026 is the single fact that decides which rules apply. Have it on record for every property.
• Keep clean records of your cost base. If the CGT change lands, your gain may be split into a pre- and post-1-July-2027 slice. Good records of what you paid, your capital improvements and your holding costs make that far easier to get right.
• Track your cashflow and tax position year-round. Knowing your real rental loss, your deductions and your gain as you go - not just at tax time - means you can see the impact of any change on your own numbers rather than guessing.
• Talk to your accountant before you act. Buying, selling or restructuring around a law that has not yet taken effect is exactly the kind of decision to run past a registered tax agent for your situation.

This is where Vestly helps. It keeps your purchase date, cost base, cashflow and live tax position on record for every property, all year round - so when the rules do change, you already have the numbers you need to see exactly how you are affected.