ATO's changes to negative gearing, new builds still apply
Updated: Sep 18
If you own or are thinking about buying an investment property in Brisbane, there are some important tax changes you need to understand.
From 1 July 2027, negative gearing on residential property will generally be limited to new builds.
That does not mean negative gearing is disappearing. It means the rules will be different depending on whether you buy a new property or an established property.
Here’s the simple version.
What is changing?
Under the current system, an investment property that makes a rental loss can potentially allow you to offset that loss against other taxable income, such as your salary.
From 1 July 2027:
New builds: negative gearing will continue to be available.
Established properties purchased after 12 May 2026: rental losses generally cannot be offset against wages or other non-residential income.
Instead, unused losses can generally be carried forward to offset future residential property income, including certain capital gains.
Properties already owned at 7:30pm AEST on 12 May 2026: existing negative gearing arrangements are preserved.
So, for investors, the question is becoming less about simply finding a property that produces a tax deduction - and more about what the property actually does for your portfolio.
What does this mean for Brisbane investors?
Brisbane investors should be looking closely at cash flow, rental demand, location, growth potential and the type of property being purchased.
For example, if you're deciding between:
Established property
May have established rental demand and a proven location
But future rental losses may not be able to reduce your salary income under the new rules
New property
Negative gearing remains available
Contributes to new housing supply
May offer depreciation and other tax considerations
But the numbers still need to make sense beyond the tax benefits
The key takeaway: don't buy a property simply because it gives you a tax deduction.
What about properties you already own?
If you owned an investment property before 7:30pm on 12 May 2026, the existing negative gearing arrangements are preserved for that property.
If you are already a Brisbane property investor, this means there is no need to make a decision based purely on headlines.
Instead, review:
Your current rental income
Loan costs and interest rates
Cash flow
Rental growth
Property value and equity
Your long-term investment strategy
What about buying an established property before July 2027?
There is an important transition period.
An established property purchased between 12 May 2026 and 30 June 2027 can generally continue to be negatively geared during that period.
However, from 1 July 2027, the new rules apply to established properties purchased after Budget night.
That makes the timing of an investment decision particularly important.
What about Capital Gains Tax?
The Budget also includes changes to CGT from 1 July 2027.
The current 50% CGT discount for individuals, trusts and partnerships will be replaced with an inflation-based approach and a minimum 30% tax rate on real capital gains.
There are transitional rules for existing investments, and new-build investors will have additional options under the new system.
This means investors should consider the whole investment lifecycle — not just the tax deduction you receive when you buy.
What should Brisbane investors do now?
1. Review your existing portfolio
Look at each property individually.
Is it producing strong rental income? Is the location performing? Does the debt still make sense? Would you buy the property again today?
2. Don't make tax the reason you buy
A tax deduction doesn't make a poor investment good.
The property still needs to make sense based on price, location, rental demand, supply, land value and long-term potential.
3. Look closely at new developments
With negative gearing remaining available for eligible new builds, new residential property may become increasingly relevant to investors.
For Brisbane investors, this could mean looking more closely at new apartments, townhomes and house-and-land opportunities where the underlying property fundamentals stack up.
4. Get your accountant and broker involved early
Tax treatment and borrowing capacity are personal to your circumstances.
Before purchasing, speak with your accountant and mortgage broker and model the numbers under the new rules.
The bottom line
The property investment landscape is changing. But the answer isn't simply "buy now" or "buy new."
The smarter question is:
Does this property make sense as an investment without relying entirely on the tax benefits?
For Brisbane investors, that means putting greater emphasis on quality assets, rental demand, cash flow, location and long-term fundamentals.
Tax rules can change.
A good property investment strategy should be built to withstand those changes.
This information is general in nature and should not be relied upon as tax, financial or legal advice. Speak with your accountant, financial adviser or mortgage broker about your individual circumstances. Tax reform details may continue to be updated as legislation is implemented.
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