15 May Federal Budget 2026 – Key Takeaways for Australian Property Investors
The 2026 Federal Budget marks one of the most significant shifts in Australian property tax policy in more than 25 years. If you own an investment property in Noosa, or are thinking about purchasing one, the changes will directly affect your strategy. We’ve put together a high level summary of the Federal Budget 2026 to help investors understand the changes that will impact them.
2 Big Changes for Investors
Negative Gearing
Negative gearing on residential investment properties will be limited to new build homes. If you purchase an established dwelling after 7:30pm on 12 May 2026, you will no longer be able to offset rental losses against your salary or other personal income from 1 July 2027. Those losses can only be carried forward and applied against future rental income or capital gains from the same property.
Capital Gains Tax
Also from 1 July 2027, the existing 50% capital gains tax (CGT) discount will be replaced with a cost base indexation model, along with a new minimum 30% tax rate on real capital gains. These changes will apply to all CGT assets held by individuals, partnerships and trusts for at least 12 months.
Capital Gains Tax: What’s Actually Changing
For any established property purchased after tonight’s announcement, here’s how CGT will work from 1 July 2027:
- The existing flat 50% discount on nominal capital gains is removed.
- In its place, investors receive an indexation-based discount (accounting for inflation), with a minimum 30% tax rate applied to the remaining gain.
- CGT on the family home (as per the main residence exemption) is completely unchanged.
- CGT arrangements inside superannuation are also unaffected.
For new builds, investors get to choose between the old 50% discount or the new indexation model, whichever produces the more favourable outcome at time of sale.
Owning Property Through a Trust
Many investors hold property through discretionary trusts, and the 2026 Federal Budget introduces a separate change in this instance. From 1 July 2028, trust distributions will be taxed at a minimum rate of 30%, in line with ordinary income tax rates. If your properties are held in a trust, we recommend sitting down with your accountant to work out the next best steps for your investment.
What Should Investors Do Now?
If You Currently Own Property
All current property owners will be able to continue to negatively gear any properties held before 7:30pm on 12 May 2026. This means that your ability to offset any rental losses or expenses against your salary or other income remains intact for as long as you own said properties, in other words, nothing changes in your day-to-day tax position.
However, it is worth mentioning that the CGT landscape has shifted for existing investors. When you eventually sell, any capital gains accrued up to 1 July 2027 will still attract the old 50% discount, but any growth after that date will be subject to the new indexation model and 30% minimum tax.
If your property has seen significant capital growth, it may be worth speaking to your accountant about getting a formal valuation done before 1 July 2027 to clearly establish what gains fall under which rules.
If You’re Planning on Investing
All future investors will still be able to negatively gear property investments if they are new builds, including off-the-plan apartments, newly constructed houses or homes built on previously vacant land.
Final Thoughts
Noosa remains one of Australia’s most resilient and desirable property markets. The underlying drivers, including lifestyle, limited supply and strong rental demand, haven’t changed. While taxation rules have changed, informed investors who adapt their strategy early will be best placed to navigate what comes next.
At Aspire Property Management, we work exclusively with Noosa property owners and investors. If you’d like to talk through what these changes mean for your specific situation, get in touch with our team today to learn more.
Please Note: This article is intended as general information only and does not constitute financial or tax advice. Please consult a qualified financial adviser or accountant before making investment decisions.
Frequently Asked Questions
Only partly. For any property bought before 7:30pm on 12 May 2026, any gains accrued up until next July will keep the 50% discount, except for any time that falls before July 2027, during which gains will keep the 50% discount. However, any future gains on the same property will be subject to the new inflation discount and the 30% minimum.
Yes. Those who bought properties before 7:30pm on 12 May 2026 can continue to use the current negative gearing rules for as long as they own the properties.
Anybody who buys an investment property after 7:30pm on 12 May 2026 will get a discount that is equal to inflation over the time the asset is held, except for any time that falls before July 2027, during which gains will keep the 50% CGT discount. Once a capital gain is adjusted for inflation, it is then taxed as regular income, but subject to a 30% minimum rate of tax.
Yes, but with some limitations. For properties held before 7:30pm on 12 May 2026, and for eligible new builds, negative gearing works exactly as before. For established properties purchased after that date, rental losses can no longer be offset against salary or other personal income from 1 July 2027.
Noosa is a predominantly established market that is tightly held and has limited supply. However, there are select new build opportunities across the broader Noosa region. Given the tax advantages that new builds now provide, they’re worth exploring as part of a new investment strategy. The team at Aspire Property Management can help point you in the right direction.