Negative gearing changes calculator: What the 2027 reforms really cost you
Negative gearing didn't die quietly. On 26 June 2026 the changes became law, and the headlines have been running a funeral ever since - property's finished, the investor's dead, sell everything. It makes for a good scare. It's also mostly wrong. This calculator runs your actual numbers - rent, holding costs, capital gains tax - under the old rules and the new ones, across your full hold. Then it shows you the bit worth paying attention to: how much the change really costs you, and how much you still walk away with.
What the 2026
reform really costs you
Total return over your full hold - rent, holding costs and capital gains tax - under the old rules and the new post-Budget rules. Drag the hold period and watch what changes.
New rules index your cost base to CPI instead of the old 50% discount.
Marginal rate 39% incl. Medicare. CGT floor under new rules is 30%.
Your total return
Net profit by hold period
Under the new rules your rental losses aren't lost - they're deferred, and over a full hold they come back. That nets to roughly zero. The only thing that actually moves your bottom line is the capital gains tax change.
The reform trims the edges. It doesn't change the game - a well-picked growth asset does the heavy lifting.
General information only – not tax, financial or investment advice. Compares total nominal return under pre-Budget rules (negative gearing offset against income; 50% CGT discount) and the proposed post-Budget rules (quarantined losses for established property; CGT cost base indexed to CPI with a 30% minimum rate). Assumes the selected loan structure over a 30-year term, full occupancy and a fixed interest rate; principal repayments are not tax-deductible. The capital gain is taxed at your marginal rate. The Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 (Cth) has not passed and detail may change; property acquired on or before 12 May 2026 is grandfathered under the old rules. Growth, rental growth, CPI and depreciation are assumptions, not forecasts. Verify your position with a registered tax agent before acting. © Premier Buyers – premierbuyers.com.au
What actually changed
From 1 July 2027, two things shift for residential property bought after 7:30pm on 12 May 2026:
→ Negative gearing. If your property runs at a loss, you can no longer offset that loss against your salary. The loss gets quarantined - parked, carried forward, and used later against rental income or the capital gain when you sell.
→ Capital gains tax. The 50% discount is replaced. Instead, your cost base is indexed to inflation and your gain is taxed at a minimum of 30%.
Two groups are untouched. If you owned the property before 12 May 2026, you're grandfathered - nothing changes. And new builds keep negative gearing, and get to choose the better of the old or new CGT treatment.
Source: Australian Taxation Office, "Reforming negative gearing and capital gains tax", current as at June 2026. Treasury Laws Amendment (Tax Reform No. 1) Act 2026, enacted 26 June 2026.
You still make money - here's the part worth paying attention to
Run the calculator and the pattern shows up fast: under the new rules, you still turn a profit. Usually a big one. The change trims the edge, it doesn't remove the return.
Where it bites hardest is high growth over a long hold - that's where losing the 50% discount stings, because the discount rewarded big gains and indexation only strips out inflation. Where it barely registers is the typical hold most investors actually run. Drag the hold-period slider and watch the gap between the two lines. For most quality assets, it's a slice, not a cliff.
Why quarantined losses aren't the disaster they sound like
Losing negative gearing against your salary sounds brutal. In total-return terms, it mostly washes out - because the losses aren't gone, they're deferred. They move through three phases:
→ Accumulate - losses bank up while the property is negatively geared.
→ Absorb - they soak up rental income tax-free once the property turns positive.
→ Offset - anything left reduces your capital gain at sale.
You get the benefit later instead of now. Over a full hold, the thing that actually moves your bottom line isn't the negative gearing change - it's the CGT change.
New builds: where the old deal survives
If you buy a new build, you keep negative gearing, and when you sell you can pick whichever CGT method leaves you better off - the old 50% discount or the new indexation regime. That optionality is now a genuine reason the new-build-versus-established decision carries real tax weight, not just a construction-quality question.
What this means if you're buying now
Buy an established property today and you can negatively gear it until 30 June 2027 - then it stops, and your holding cost jumps to the full out-of-pocket figure. Already owned it before 12 May 2026? You're grandfathered. Looking at a new build? The old benefits largely survive. The right answer depends on your income, your hold, and the asset - which is the entire reason to run your own numbers rather than trust a headline.
Frequently asked questions
Has negative gearing been abolished?
Not entirely. For established residential property bought after 7:30pm on 12 May 2026, the ability to offset rental losses against your salary ends on 1 July 2027. Losses are quarantined and carried forward instead. Property owned before that date, and eligible new builds, are unaffected.
Do I still make money under the new rules?
In most scenarios, yes. The reform reduces your after-tax return, but the calculator shows the property still turning a healthy profit at typical growth rates and hold periods. The gap only becomes material at high growth over very long holds.
What happened to the 50% CGT discount?
For assets sold on or after 1 July 2027, the 50% discount is replaced with cost base indexation plus a minimum 30% tax rate on the gain. New residential dwellings can still choose the old discount.
Am I grandfathered?
If you held the property (including under contract) before 7:30pm on 12 May 2026, yes - the old rules continue to apply for as long as you hold it.
Looking at a specific property and want a second set of eyes on the numbers - including whether a new build changes the maths in your favour? Book a free discovery call. No pitch, just the numbers.