Negative gearing changes and proposed CGT changes could affect Australian property investors, especially landlords who own or are considering buying established rental properties.
The Federal Government has announced proposed changes to negative gearing and capital gains tax, and property investors should be paying attention. While the final details may still need to be confirmed, the direction is clear: the government wants to encourage more investment into new housing supply.
Negative Gearing Changes Explained
Negative gearing is when the costs of owning an investment property are higher than the rental income received. These costs can include loan interest, strata levies, council rates, repairs, maintenance, insurance and property management fees.
At the moment, many investors can offset that rental loss against their taxable income. For some landlords, this has been an important part of making an investment property affordable, especially during periods of higher interest rates.
The proposed negative gearing changes are expected to limit negative gearing mainly to newly built properties from 1 July 2027. This means investors buying established properties after the change may not receive the same tax treatment they currently receive.
What Are the Proposed CGT Changes?
The government has also proposed changes to capital gains tax. The current 50% CGT discount may be replaced with an inflation-based concession, along with a minimum tax on gains.
For property investors, this matters because capital gains tax can have a major impact when selling an investment property. The after-tax result can be very different depending on purchase price, holding period, improvements, selling costs and personal tax circumstances.
What Do Negative Gearing Changes Mean for Landlords?
For landlords, the biggest issue is confidence. If investing in established rental properties becomes less attractive, some investors may decide not to buy, or may decide to sell. In tight rental markets, that can place more pressure on rental supply.
The government’s aim is to encourage investment into new housing, which is a worthwhile goal. The practical question is whether these changes will create enough new homes quickly enough, or whether they will make some property investors more cautious.
What Should Property Investors Do Now?
Property investors should not rush into decisions based only on headlines. The best approach is to stay informed, review the numbers carefully and speak with a qualified accountant or tax adviser before making any major decision.
Good property selection, realistic rent expectations, proper tax advice and strong property management will become even more important.
At Axios Real Estate, we will continue to monitor the proposed negative gearing changes and CGT changes and what they may mean for landlords across Mosman, Cremorne, Neutral Bay, Kirribilli, McMahons Point, Milsons Point and the surrounding Lower North Shore.
Why Local Advice Matters
Every property and every landlord’s situation is different. A well-located apartment in Mosman, Cremorne, Neutral Bay or McMahons Point may perform very differently from a property in another area. Rental demand, vacancy rates, strata costs, interest rates and long-term capital growth all need to be considered together.
For some investors, holding a quality rental property may still make sense. For others, the proposed negative gearing changes and CGT changes may affect future buying or selling decisions. This is why it is important not to rely only on headlines or general commentary.
Landlords should review their position with their accountant and property manager before making any major decision. The right advice can help investors understand cash flow, rental return, likely tenant demand and the long-term strategy for the property.
For landlords, the main message is simple: stay informed, review the numbers carefully, and get proper advice before making any decision about buying, selling or holding an investment property.
