When it comes to property investment, it's not just about what you buy. It's about having the right strategy behind it.

Changes to negative gearing announced in the 2026–27 Federal Budget could influence how Australians approach their next investment property purchase.

While existing investments are largely protected, the new rules will change how rental property losses can be claimed for certain future investments.

So, if you're considering entering the property market or adding to your portfolio, understanding these changes now could help you make more informed decisions.

First, what is negative gearing?

Negative gearing occurs when the expenses associated with an investment property, including loan interest, exceed the rental income it generates.

Under the existing arrangements, eligible investors can generally offset that loss against other taxable income, such as their salary, potentially reducing their overall tax bill.

While this can provide a tax benefit, it's important to remember that a negatively geared property is still operating at a loss. The tax deduction may help, but it doesn't eliminate the cost of holding the investment.

What's changing?

From 1 July 2027, negative gearing for residential property will generally be limited to eligible new builds, with the Government aiming to encourage investment in new housing supply.

Under the new arrangements:

• Existing investments: Residential properties held before 7:30pm AEST on 12 May 2026 will generally retain their existing negative gearing treatment.
• Future purchases of established properties: Properties acquired after that date will be subject to new restrictions from 1 July 2027. Rental losses will no longer be deductible against unrelated income, such as salary or wages.
• Unused losses: Investors will still be able to offset eligible losses against other residential property income, including capital gains, or carry forward excess losses to future years.
• New builds: Eligible new residential properties will generally continue to qualify for negative gearing under the existing arrangements.

Some exemptions and special circumstances also apply, with further implementation details continuing to be refined.

What does this mean for your next investment?

For anyone considering purchasing an investment property, the changes make it even more important to look beyond the purchase price and potential rental return.

An established property may still be a worthwhile investment, but the way you manage its ongoing costs and tax position could look different.

For example, if you're relying on rental losses to reduce the tax payable on your salary, that benefit may no longer be available for a newly acquired established property once the changes take effect.

This could influence your cash flow, borrowing decisions and the type of property you choose to invest in.

It also creates an opportunity to consider whether a new build, an established property or another investment approach is better aligned with your financial goals.
 

The key is to understand the numbers before making the commitment.
 

Planning ahead makes a difference

Property investment should always be considered as part of your broader financial picture.

Before making your next move, it's worth reviewing how the investment fits with your existing assets, borrowing arrangements, cash flow and long-term goals.

A few important questions to consider:

• Will the property remain affordable if interest rates, rental income or expenses change?
• How will the new tax treatment affect your after-tax cash flow?
• Would an eligible new build offer different tax outcomes?
• Does the investment still make financial sense without relying on negative gearing benefits?
• How might the separate Capital Gains Tax changes affect your longer-term plans?

There isn't a one-size-fits-all answer. What works for one investor may not be the right approach for another.

How SEIVA can help

At SEIVA, we believe good investment decisions start with clarity.

Whether you're purchasing your first investment property or expanding an existing portfolio, we can help you understand the tax implications, review the financial impact and consider how your plans fit within your broader business and personal goals.

Where specialist property, lending or financial advice is needed, we can also help coordinate the right expertise to support your decision.

Thinking about your next investment?

The negative gearing changes don't mean you need to put your investment plans on hold. They do mean it's worth understanding how the rules could affect your next purchase.

If you're considering a new investment, speak with your SEIVA Advisor before making any decisions.

A conversation today could help you make your next move with greater clarity and confidence.