Could Changes to Negative Gearing and the CGT Discount Be on the Horizon?

With continuing pressure on the 2026-2027 Federal Budget, there has been renewed discussion about possible changes to the taxation of investment properties.

Two areas attracting particular attention are:

Negative gearing
Possible reform options may include restricting the ability to offset rental losses against salary and other income, quarantining losses against future rental income or capital gains, or imposing limits based on the number of properties held.

Capital gains tax discount
There has also been speculation that the existing 50% CGT discount could be reduced, staggered according to the period of ownership, or made subject to a longer minimum holding period.

At this stage, these remain matters of discussion rather than announced policy. An important issue will also be whether any changes apply only to future acquisitions or extend to assets already held.

For investors considering acquiring, restructuring or selling property, the timing and transitional provisions of any reform may be just as important as the reform itself.

Until further details emerge, investors should avoid acting solely on speculation and should seek proper accounting, taxation and financial advice. For now, it may be prudent to review existing ownership structures, intended transactions and longer-term investment strategies so that informed decisions can be made if the rules change.

This article is provided for general information only and does not constitute legal, taxation, financial or investment advice. The application of the law will depend on the particular facts and circumstances of each matter. You should obtain appropriate professional advice before acting or relying on any information contained in this article.