Federal Budget 2026: What Property Investors Need to Know About Negative Gearing, CGT and New Builds

The 2026 Federal Budget has introduced significant changes to how property investments are taxed in Australia and for many investors, the details matter far more than the headlines.



Here’s a clear breakdown of what changed, what didn’t, and what it means for your investment strategy.

Negative Gearing: What’s Changed

Negative gearing: the ability to offset property losses against your taxable income… for new purchases of established properties, negative gearing no longer applies.

However, there is an important exception: new builds and house & land packages still qualify.

If you exchanged contracts before 7:30pm on 12 May 2026, you are fully grandfathered under the previous rules. Nothing changes for existing arrangements.

Capital Gains Tax: The New Framework

The 50% CGT discount has been removed, but it has been replaced with an indexation model. Under indexation, you are only taxed on gains that exceed inflation, meaning the real-world impact for property investors is broadly similar to before.

For example: property growing at 6% per year in a 3% inflation environment would attract tax on roughly 3% of gains, comparable to the old discount structure.



There is, however, a new minimum CGT rate of 30%, which applies without exception across all asset classes.

Trust Distributions: A Major Shift

One of the most significant changes affects trust structures. The common strategy of distributing income to low-income family members to reduce overall tax liability is effectively no longer viable. All trust distributions now attract a minimum 30% tax rate.

What Remains Unchanged

Bucket companies, SMSFs and superannuation funds were not affected by this budget. These remain effective tools for structuring long-term wealth.

What This Means for Property Investors

This budget creates a clear signal for investors: new builds are now structurally advantaged over established properties. For those considering their next investment, house and land packages offer retained negative gearing eligibility, potential CGT efficiencies under the new indexation model, and alignment with the government’s housing supply goals.

The Bottom Line

Whether you’re an existing investor reviewing your structure or a first-time buyer exploring your options, understanding how these changes apply to your specific circumstances is essential. Getting professional financial and tax advice early, ideally before your next purchase, could make a meaningful difference to your long-term returns.

What this means for you

This budget is signalling clearly: if you’re going to invest, new builds are the smarter structure. And right now, we have turnkey investor packages ready to go in some of the strongest growth corridors in NSW and QLD.

Currently available:

• Central Coast – duplex, dual key & standard packages.
• Denman – dual key, co-living & standard packages.
• Newcastle Region – registered land available now.
• Queensland – contact us for the latest releases.

Hudson Invest offers turnkey investor packages across key growth corridors in NSW and QLD, get in touch with our Hudson Invest team to book a Strategy Session today.