New property tax changes came into effect on 1 July 2026, bringing significant changes for investment property owners across Australia.
The changes affect two key areas of property investing: negative gearing and Capital Gains Tax (CGT). While these updates have generated plenty of discussion, many existing investors are protected by grandfathering provisions.
Understanding what has changed and whether it applies to you can help you make informed decisions about your investment property.
What has changed to negative gearing with the new proprety tax changes?
Negative gearing allows property investors to claim eligible investment losses against their taxable income.
Under the new property tax changes, negative gearing is now restricted to newly constructed investment properties.
This change has been introduced to encourage the construction of new housing while reducing tax incentives for established properties.
Will existing investors lose negative gearing?
For many current investors, the answer is no.
The new rules are grandfathered, which means investors who owned an established investment property before the changes came into effect can continue claiming negative gearing under the existing rules.
If you already own an eligible investment property, your current tax arrangements remain unchanged.
What has changed to Capital Gains Tax?
The new property tax changes also affect how Capital Gains Tax (CGT) is calculated.
Previously, investors who owned a property for more than 12 months could receive a 50% discount on the taxable capital gain when they sold.
Under the new rules, that discount has been replaced with a system that adjusts for inflation. Instead of paying tax on the full increase in value, investors will only pay tax on the gain above the inflation rate.
For example, if your investment property increases in value by 5% and inflation is 3%, tax would only apply to the remaining 2% gain.
What do these property tax changes mean for investors?
The biggest takeaway is that existing investors should not assume these changes apply to every property they own.
If your investment property qualifies under the grandfathering provisions, your current tax treatment remains the same.
However, if you’re planning to purchase another investment property, it’s important to understand how the new rules may affect your future investment strategy and borrowing decisions.
What should you do next to stay on top of the property tax changes?
Property tax rules can be complex, and every investor’s circumstances are different.
Before buying or selling an investment property, speak with your accountant or financial adviser to understand how these property tax changes may apply to your situation.
If you’re considering buying or selling an investment property in Adelaide, the team at AMKAR Real Estate can help you understand the local market and support you throughout your property journey. Contact us here.
Disclaimer: This article is general information only and does not constitute financial, taxation, or legal advice. Tax laws may change, and individual circumstances vary. Please seek advice from a qualified accountant or financial adviser before making investment decisions.