If you own an investment property or have been considering buying one, the rules around negative gearing have now changed. The Federal Government's reforms, announced in the 2026 Federal Budget, are already in effect for new property purchases, and they will reshape the way many Australians approach property investment for years to come.
The change has already started. Understanding exactly where things stand right now will help you make informed decisions rather than rushed ones.
From 1 July 2027, negative gearing will no longer be available on established residential investment properties purchased after 12 May 2026.
In plain language: if you buy an existing (already built) residential property as an investment, the 12 May 2026 cut-off date has already passed. Any established property purchased from that date onwards will not be eligible for negative gearing from 1 July 2027.
This is a meaningful and permanent shift from how property investment has worked in Australia for decades.
Newly constructed properties are exempt. If you purchase a brand-new property or a property being built for the first time, negative gearing will still apply under the current rules. This exemption is specifically designed to encourage new housing supply.
Properties you already own are not affected. If you currently own an investment property, your existing tax position on that property is not changed by this reform. You can continue to negatively gear your existing investments as you have been.
The change only applies to new purchases of established properties from 12 May 2026. If you purchased an established investment property before that date, you are also unaffected.
Negative gearing has been one of the most widely used strategies in Australian property investment. For investors who hold a property where rental income does not cover the costs of the loan and expenses, the ability to offset that shortfall against taxable income has been a key part of how the numbers work.
Removing this benefit for new established property purchases changes the financial equation. It does not make investing impossible, but it does mean the way investors structure their purchases, and their loans deserves more careful thought than before.
The type of property you buy, the loan structure you choose, and the market you invest in all carry more weight in this new environment.
ABS data shows investor lending grew 25.3 per cent year-on-year to March 2026. Investors have not stepped back from the market. What we are seeing is a shift in how they are thinking about their purchases.
There is noticeably more interest in new build investment properties since the Budget announcement. With new builds remaining exempt from the negative gearing changes, many investors are exploring whether a new build suits their goals and their borrowing capacity.
Queensland and Western Australia continue to attract significant investor interest, with both markets showing strong price growth and rental demand. New build opportunities in these markets are drawing attention from interstate investors as well as locals.
If you are an existing investor, now is a good time to speak with your accountant to understand how your current portfolio sits in light of these changes, and whether your loan structure is still working well for your goals.
If you are considering your first investment property or your next one, the key questions have shifted slightly. It is worth exploring:
- Whether a new build or an established property makes more sense for your situation
- How the loan structure for each option differs
- What your borrowing capacity looks like in the current lending environment
- How your existing equity, if you own a home already, could factor into your plans
As mortgage brokers, our role is to help you understand the lending side of this equation. The tax implications are a matter for your accountant. What we can do is make sure your loan structure is well positioned for whatever direction you decide to take.
New Build | Established Property
| Feature | New Build | Established Property |
|---|---|---|
| Negative gearing (new purchases post 12 May 2026) | Still available | No longer available from 1 July 2027* |
| Depreciation benefits | Generally higher | Lower on older properties |
| Rental income | Market dependent | Market dependent |
| Construction risk | Applicable if buying off the plan | Not applicable |
| Entry price | Varies by location | Varies by location |
This table is for general illustrative purposes only and does not constitute financial or tax advice.
I already own an investment property. Do I need to do anything?
The changes do not affect properties you already own. Your existing negative gearing position is unchanged. It is still worth speaking with your accountant at tax time to make sure everything is structured correctly, but you are not required to do anything differently because of this reform.
Does this affect my current loan?
The negative gearing changes are a tax matter, not a lending matter directly. However, how you structure your investment loan can influence how your investment performs financially, so it is always worth making sure your loan setup aligns with your goals.
What if I was already in the process of buying an established property before 12 May 2026?*
The cut-off date for the new rules is 12 May 2026. If your purchase was contracted before that date, you should speak with your accountant to understand your specific position.
Are commercial properties affected?
These reforms specifically relate to residential properties. Speak with your accountant and a commercial lending specialist for advice on commercial property investment.
What does this mean for my borrowing capacity?
Your borrowing capacity is assessed based on your income, expenses and liabilities. Negative gearing changes do not directly affect how lenders assess your borrowing power, though your overall investment strategy may influence which loan products suit you.
Whether you are an experienced investor reassessing your strategy or someone who has been thinking about entering the investment market, getting informed early puts you in a far stronger position.
At Mortgage Achievers, we are helping clients navigate the lending side of these changes every day. We can walk you through your borrowing options, explain how different loan structures work, and help you move forward with clarity.
Speak with a Mortgage Achievers broker today.
Call us on 1300 851 103 or visit mortgageachievers.com.au to arrange a complimentary strategy session.
Disclaimer: This article is general in nature and does not constitute personal financial, tax or lending advice. The negative gearing reforms are subject to legislative process and individual circumstances will vary. Please speak with a qualified accountant and mortgage broker to understand how any of the above may apply to your personal situation.
Mortgage Achievers | MFAA Member | Helping Australians achieve their property goals since 2003