Negative gearing has survived multiple election cycles untouched. The 2026-27 Budget changes that, though more gently than past proposals suggested.
From 1 July 2027, losses on established residential rental properties acquired after 7:30pm AEST on 12 May 2026 can only be offset against rental income or capital gains from residential property. They can't be used to reduce your salary, business income, or other investment income. Properties acquired before that cut-off are fully grandfathered under the current rules.
Two important carve-outs. Newly constructed residential property is excluded from the change, meaning losses on new builds remain deductible against other income. Commercial property and shares are also unaffected.
So the practical result is a tiered system:
If you're a business owner with an existing residential portfolio, nothing changes for what you already own. But the maths on adding another established property has shifted, and the case for new builds, commercial, or different asset classes is stronger than it was.
We'll work through this with anyone whose investment plans were built on the old assumptions.