Federal Budget Update: What This Could Mean for Property Owners

Following last week’s Federal Budget announcement, we wanted to share a general overview of proposed changes that may be relevant to you as an investor.

The Federal Government has announced significant changes to negative gearing, capital gains tax and trust taxation rules which, subject to legislation being passed, may impact both future property purchases and existing investment holdings.

Our Summary:

Negative gearing

• Existing investment properties remain unchanged - landlords who already own established investment properties before 7:30pm on 12 May 2026 will retain existing negative gearing arrangements.
• A transition period applies – investors who purchase established properties between budget night and 30 June 2027 will retain access to current negative gearing rules until 30th June 2027.
• From 1 July 2027, negative gearing will be limited to new builds – investors purchasing established residential properties after this date may no longer be able to offset losses against their taxable income in the same way.

Capital Gains Tax (CGT)

• The current 50% CGT discount remains in place for gains accrued up until 30 June 2027.
• From 1 July 2027, future capital gains will move to an inflation-indexed calculation model, meaning only gains above inflation may be taxed under the new system after this date.
• A 30% minimum tax on net capital gains has also been announced, with further legislative detail still to come.

Trust structures

• Changes have also been announced which may impact investors who hold assets within discretionary or family trust structures, including a new minimum tax rate of 30%.
• These changes are not scheduled to commence until 1 July 2028.

What does this mean for our landlords?

At this stage, further detail is still expected as legislation progresses through parliament. Existing landlords should avoid making decisions based on headlines alone and instead seek advice tailored to their situation.

From a property investment perspective, the underlying fundamentals remain unchanged:

• Adelaide continues to experience low vacancy rates & low housing supply in general
• Australia still has a structural housing shortage, with population growth continuing to outpace new housing supply
• Rental demand remains strong
• Quality investment properties continue to see strong long-term capital growth while tenants contribute toward holding costs
• Existing property owners may hold a stronger position than those looking to enter the market in the future

In the coming weeks, we’ll be hosting an in-office information session to help our clients better understand these announced changes and ask general questions in an educational setting.

If you’d like to attend, please reply to this email to register your interest and reserve a place. We’ll then be in touch with available dates and times once details are confirmed.

As your property manager, we’re unable to provide financial or tax advice, so we recommend speaking with your accountant or financial adviser about how these changes may affect your personal circumstances.

If you’re considering buying, selling, restructuring your portfolio or simply want to better understand how your property is performing in the current market, our team is always available to assist with property-specific insights.