When the Treasury Laws Amendment (Tax Reform No. 1) Act 2026 passed in June, most of the headlines were about what investors lose. The quieter story is what the new rules deliberately protect: newly built homes. From 1 July 2027, if you buy an established investment property, rental losses can only offset rental income or future capital gains. Buy or build new, and negative gearing against your wages continues as before.
The rules, in one minute
- Established property bought after 7:30pm 12 May 2026: from 1 July 2027, losses are quarantined — they offset rental income or the property’s eventual capital gain, not your salary (unused losses carry forward).
- Newly built homes and build-to-rent: exempt. Negative gearing against your other income continues.
- Anything you owned or contracted before 12 May 2026: grandfathered under the old rules.
- CGT: from 1 July 2027 the 50% discount is replaced by CPI indexation plus a 30% minimum tax — but new builds can choose either system.
You can see exactly what this does to your own numbers in our investment tax calculator — it now shows your tax saving both before and after 1 July 2027, based on what you buy.
The depreciation edge nobody mentions
The gearing change stacks on top of an advantage new builds have had since 2017: depreciation. For established properties bought since May 2017, you can’t claim depreciation on previously used fixtures and fittings — only on works you pay for yourself. A brand-new build lets you claim both the construction cost write-off and brand-new plant and equipment from day one, usually thousands of dollars a year of paper deductions. From July 2027, those deductions also happen to sit in the only category that still offsets your wages.
What actually counts as “new”?
The exemption targets newly built homes that haven’t been previously occupied or sold as residential premises — think off-the-plan apartments, house-and-land packages, and homes you build yourself. Build-to-rent developments are also carved out. Where your exact contract sits (especially near-new or completed-but-unsold stock) is a question for your registered tax agent before you commit — the label on the brochure isn’t what the ATO reads.
A warning about the spruikers. Every tax change breeds a sales pitch, and “buy this brand-new apartment for the tax benefits” will be everywhere by 2027. Tax treatment doesn’t fix a bad asset. An oversupplied tower with weak rental demand is a bad investment with a nice depreciation schedule. The property has to stack up first — location, build quality, rental demand, resale market — and the tax comes second. If someone leads with the tax, slow down.
The construction path — and its real risks
Building (or buying house-and-land) is the most direct way into “new” — and it’s our specialty. But go in clear-eyed:
- Builder risk: insolvencies happen. We look hard at the builder, the contract, and the payment schedule.
- Timelines: construction takes months longer than buying established — you carry land interest before rent starts.
- Valuation shortfalls: a package priced above bank valuation means finding the gap yourself.
- Loan structure: construction loans draw down in stages with interest-only during the build — the structure matters as much as the rate.
Who this actually suits
Investors planning to buy after mid-2026 who want the loss to keep working against salary — new is now the only new-purchase path. Grandfathered owners don’t need to do anything. Rentvestors weighing up where the numbers work should re-run them under the new rules (our rentvesting guide covers the trade-offs). And if you’re buying inside super, different rules apply again — see the SMSF borrowing ban explainer.
For the full background on the reform itself, read our negative gearing & CGT changes guide.
General information only, current as at 3 July 2026 — not tax, financial or credit advice. Whether any investment property (new or established) suits you depends on your circumstances; confirm tax treatment with a registered tax agent before acting.