For decades, negative gearing has been a familiar part of Australian property investment.
So when the Federal Government announced that negative gearing would generally be restricted to eligible new residential properties from 1 July 2027, it’s understandable that investors began asking a simple question: is property investment still worth it?
The answer isn’t determined by negative gearing alone. In fact, the changes could reinforce something experienced property investors have understood for a long time: a good investment property should be selected because of the quality of the asset—not simply because of the tax deduction it creates.
Properties held before the Government’s announcement at 7:30 pm AEST on 12 May 2026 are grandfathered under the negative gearing reforms.
For established residential properties purchased after that point, losses will generally no longer be able to offset unrelated income such as salary and wages from 1 July 2027. Eligible new builds will retain access to negative gearing.
That changes the calculation for some investors. But it doesn’t remove many of the fundamental reasons Australians invest in residential property.
The objective of investing is ultimately to build wealth or generate income over time. Taxation affects the return, but it isn’t the underlying investment.
Consider two properties. Property A provides substantial deductions but is purchased at a premium, has weak rental demand and is located in an area with significant competing supply. Property B provides fewer immediate tax benefits but is purchased at a reasonable price in an established area with limited supply, strong rental demand and sustained owner-occupier appeal.
Which is the better investment? The answer can’t be determined from the tax deduction alone.
What percentage of the purchase price can reasonably be recovered through rent?
A theoretical rental return means little if the property regularly sits vacant.
The return on an investment starts with what you pay for it. Paying more than necessary isn’t automatically recovered simply because the property market rises.
Future demand, land supply, infrastructure, employment, schools, amenities and owner-occupier appeal can all influence long-term performance.
Strata fees, maintenance, insurance, council rates, property management and other expenses need to be considered alongside the rental income.
Who is likely to buy the property from you in the future? Properties that appeal to both investors and owner-occupiers may have a broader resale market.
Another mistake investors can make is treating Perth as though every suburb will perform the same way. They won’t.
Neighbouring suburbs can have very different housing stock, demographics, rental demand, future supply and price points. Even within the same suburb, two properties purchased for similar amounts can produce very different outcomes.
That’s why suburb selection is only the beginning. You still need to identify the right property within that suburb.
The changes to negative gearing don’t remove the case for professional property research. They potentially strengthen it.
If investors can rely less heavily on an immediate tax benefit from an established investment, there is even more reason to scrutinise what you are buying, where you are buying, what you are paying, who will rent it and who may eventually buy it from you.
At Acquire Buyers Agency, those are exactly the questions we help investors investigate.
Our job isn’t to recommend a property because it produces the biggest tax deduction. Our job is to help identify quality Perth property aligned with your purchasing objectives.
Because regardless of what happens to tax policy, buying well still matters.
Talk to Acquire Buyers Agency about your Perth property search
DISCLAIMER: Taxation and investment outcomes depend on individual circumstances. Acquire Buyers Agency does not provide taxation or financial advice. Seek appropriate independent professional advice before making an investment decision.
SOURCE NOTE: Technical tax details should be checked against current Australian Government/Treasury guidance immediately before publication, as implementation details may change.
