Australia’s property investment landscape is changing.
As part of the 2026–27 Federal Budget, the Australian Government announced significant reforms to negative gearing and capital gains tax. For property investors, particularly those considering their next purchase, these changes make understanding the fundamentals of an investment property more important than ever.
So, what is changing, when do the changes take effect, and what could they mean for Perth property investors?
Under the current system, an investor whose eligible property expenses exceed their rental income may generally offset that loss against other taxable income, including salary and wages.
From 1 July 2027, negative gearing for residential property will generally be limited to eligible new builds.
Importantly, properties held before 7:30 pm AEST on 12 May 2026 are grandfathered. Investors holding those properties can continue to access the existing negative gearing arrangements after the new rules commence.
For established residential properties purchased after the announcement, the position changes from 1 July 2027. Rental losses will generally no longer be deductible against unrelated income such as salary and wages.
Those losses don’t necessarily disappear. Investors will be able to use them against residential property income, including capital gains, and carry excess losses forward to future years.
The Government is deliberately treating new housing differently.
Eligible new builds will continue to have access to negative gearing, with the policy designed to encourage more private investment into additional housing supply.
This creates an important distinction for future investors between established and new property.
But that doesn’t automatically mean a new property is a better investment.
Property investors naturally consider taxation when assessing an investment. However, favourable tax treatment cannot turn the wrong property into the right investment.
A new apartment in an oversupplied location doesn’t automatically become a strong investment because it qualifies for negative gearing.
Likewise, an established house on a good parcel of land in a tightly held Perth suburb doesn’t automatically become a poor investment because its tax treatment has changed.
The Budget changes don’t make those factors less important. Arguably, they make them more important.
Historically, some investors have been comfortable owning a property that generates a significant annual cash-flow loss because the tax system allowed eligible losses to reduce other taxable income.
For future established-property purchases, investors may need to look more closely at the underlying performance of the asset itself.
What rent is it realistically capable of achieving? What are the likely holding costs? How much competition is there from other rental properties? Are you paying a premium to acquire it? What is likely to drive demand for the property in five, ten or fifteen years?
These aren’t new questions. But they could become increasingly important under the new tax environment.
A buyer’s agent doesn’t replace your accountant, tax adviser or financial adviser. At Acquire Buyers Agency, our role is different.
We help you assess the property.
That means researching locations, comparing opportunities, assessing comparable sales, investigating rental and buyer demand, identifying suitable properties and negotiating the purchase.
Tax rules can change. Interest rates can change. Property markets can change. The importance of buying the right asset at the right price doesn’t.
If you’re considering investing in Perth following the Federal Budget changes, speak with your accountant or financial adviser about how the new rules may affect your individual circumstances.
When you’re ready to find the property that fits that strategy, Acquire Buyers Agency can help you find it.
Speak with Acquire Buyers Agency
DISCLAIMER: This article contains general information only and does not constitute taxation, financial or investment advice. You should obtain independent professional advice appropriate to your circumstances.
