Negative Gearing, Depreciation, and CGT: What Changed After the 2026-27 Budget

Every Federal Budget brings a wave of commentary about property investment — some of it useful, most of it noise. Following the 2026-27 Budget, we’ve had a steady stream of questions from clients about what’s actually changed, and more importantly, what it means for their strategy.

Here’s a plain-English breakdown of the three areas investors ask about most.

Negative Gearing

Negative gearing remains one of the most discussed — and most misunderstood — levers in property investment. The core mechanism hasn’t fundamentally changed: investors can still offset investment property losses (where holding costs exceed rental income) against other taxable income.

What matters isn’t the headline policy setting, but how it interacts with your personal financial position — income level, portfolio structure, and long-term goals. Negative gearing is a tool, not a strategy in itself, and its value depends entirely on the property and the investor holding it.

Depreciation

Depreciation continues to be one of the more underused levers available to investors, particularly on newer builds and off-market house and land packages. A quantity surveyor’s depreciation schedule identifies both capital works deductions and plant and equipment deductions, and the gap between investors who commission one and those who don’t can be significant over a holding period.

If you haven’t reviewed your depreciation position recently — especially if you’ve added a property in the last 12 months — it’s worth checking whether you’re capturing everything available to you.

Capital Gains Tax (CGT)

CGT settings remain a key consideration for exit strategy, particularly around the 12-month discount threshold and how gains interact with your income in the year of sale. Timing a sale — or choosing not to sell at all — is often as much a tax conversation as it is a market one.

The most common mistake we see isn’t misunderstanding the rules; it’s not factoring CGT into the decision before a property is purchased, when structure and intent are easiest to set up correctly.

The Bigger Picture

Budget commentary tends to focus on what’s changed. The more useful question for investors is usually: does this change anything about my strategy? For most of our clients, the answer is no — the fundamentals of buying well, holding with intent, and structuring correctly matter more than any single policy adjustment.

If you want to understand how these settings apply to your specific portfolio or purchase plans, our team is well placed to walk through it with you.

Have questions about your own position? Book a strategy call and we’ll go through the detail together.