Negative gearing reforms

The Government will limit negative gearing for residential property to new builds.

From 1 July 2027, losses from established residential properties will only be deductible against rental income or the capital gains from residential properties. Excess losses will be carried forward and able to be offset against residential property income in future years. These changes will apply to established residential properties acquired from 7:30PM (AEST) on 12 May 2026.

Transitional arrangements will ensure the arrangements for taxpayers who made investment decisions under current settings do not change. Properties purchased or held prior to announcement will be exempt from the changes until disposed of (ie the changes will apply to the new owner). This includes properties where a contract has been entered into but not yet settled.

Properties purchased after 7:30pm (AEST) on 12 May 2026 and before 30 June 2027 may be able to be negatively geared during this period, but not in subsequent years.

Eligible new builds will be exempt from the changes, ensuring the benefits of negative gearing are directed to investment that increases the housing stock. Properties in widely held trusts and superannuation funds will be excluded, alongside targeted exemptions for build-to-rent developments and private investors supporting government housing programs.