Overall, the Australian property market’s underlying fundamentals remain unchanged; fluctuations are driven by population growth, housing undersupply, and continued demand for quality accommodation across both owner-occupier and investment sectors. The key takeaway from the announcements is the Government’s decision to preserve significant incentives for specific property investments, namely newly built properties, while also maintaining important protections for owner-occupiers and supporting first-home buyers.
Current negative gearing arrangements will remain protected under grandfathering provisions until the property is sold. Additionally, the current 50% Capital Gains Tax (CGT) discount will remain in place for gains accrued until July 1, 2027.
Full existing negative gearing benefits are retained, with no change to the arrangements. Investors will also have flexibility regarding CGT treatment at the time of sale. Additionally, where a developer sells a newly completed property within 12 months of completion, and it has not previously been tenanted for more than 12 months, the purchaser retains the ability to negatively gear that property.
While changes are proposed for future purchases of established properties, investors still retain access to current negative gearing rules until 30 June 2027. Properties purchased after 7:30pm on 12 May 2026 can therefore still access negative gearing for this transition period.
The family home remains a strong asset as it is fully protected, with no proposed changes to the CGT exemption on primary residences; reinforcing certainty and confidence in this market segment.
The measures are expected to support greater long-term accessibility by potentially creating opportunities through reduced competition from investors in certain market segments.
Rental supply of established properties is expected to tighten over time as investor activity in this segment moderates. This is an area we are watching closely, as affordability for renters remains an important consideration for the broader market.
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