In short
- Under the law today, from 1 July 2027 indexation replaces the capital gains tax discount for individuals, trusts and partnerships; a sale before then keeps the discount, and an asset held on 30 June 2027 keeps it on its gain up to that date.
- Under the law today, a rental loss on a home bought after 7.30pm AEST on 12 May 2026, new build or established, cannot be set against wages or other income from the 2027-28 income year.
- The Tax Reform No. 3 Bill 2026, which would set in law what counts as a new home, has passed the House but is not yet law.
The capital gains tax changes apply to sales from 1 July 2027, when the 50 per cent discount gives way to indexation for most sales. Two other dates sit alongside them. Since May 2017, an investor buying an established home usually cannot depreciate the fittings already in it. From the 2027-28 income year a rental loss on an established home bought after 7.30pm AEST on 12 May 2026 can no longer be taken off wages or other income. The Tax Reform No. 3 Bill 2026, passed by the House on 29 October 2026 and not yet law, would change this.
The dates, 2017 to 2027
- 9 May 2017Law
Investment property depreciation: the 2017 change
In most cases, an investor who buys an established home after 7.30pm AEST on 9 May 2017 cannot claim depreciation on the plant and equipment already in it. That means the appliances, carpets and other fittings that came with the home. Items the investor buys new for the home can still be claimed.
The building itself, called capital works, can still be claimed. For most homes that is 2.5 per cent of the construction cost a year, over 40 years.
Source: ATO, Second-hand depreciating assets (updated 22 June 2026); ATO, Capital expenses (updated 21 May 2026).
- 12 May 2026Law since June 2026
Negative gearing changes: see the full page
For an established home bought after 7.30pm AEST on 12 May 2026, the negative gearing changes are set out in full on the negative gearing changes page.
Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Act No. 49 of 2026; Budget 2026-27, tax explainer: negative gearing and capital gains tax.
- 1 July 2027Law, applies from this date
Does the 50% capital gains tax discount still apply in 2026?
Yes. A sale before 1 July 2027 keeps the 50 per cent discount in full, for an asset held for 12 months or more. For a sale from that date, the discount ends for individuals, trusts and partnerships. In its place, the cost base rises with inflation. For an individual, a minimum tax of 30 per cent applies to the gain, except in a year they receive the Age Pension or another listed payment.
An asset held on 30 June 2027 keeps the discount on its gain up to that date, with its value at 1 July 2027, from a valuation or a set apportionment method, marking the line. Gains on new homes and affordable housing keep a choice of the discount, and sit outside the minimum tax, but what counts as a new home is not yet set.
Source: Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Act No. 49 of 2026; ATO, Tax reform - Boosting home ownership - Reforming negative gearing and capital gains tax (updated 29 June 2026); Budget 2026-27, tax explainer.
- 14 October 2026A bill, not yet law
What the bill would change, if Parliament passes it
The Tax Reform No. 3 Bill 2026, passed by the House of Representatives on 29 October 2026 and not yet law, would exempt from the negative gearing limits a dwelling enrolled under NDIS rules as a specialist disability accommodation dwelling, from the 2027-28 income year. It would also set the legal meaning of a new home.
The Senate has not passed it, and it can change before it does. Until then, the June 2026 law applies.
Source: Treasurer, media release “Tax reform for a fairer tax system”, 14 October 2026; Treasurer, second reading speech, Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, 14 October 2026.
The dates, when you come to sell
When a plan includes selling one property to buy the next, the likely buyer comes into it. An investor who buys an established home now cannot set its rental loss against wages or other income from the 2027-28 income year. That can thin the pool of investor buyers.
Under the law today no home yet counts as new, so a new build bought now is caught too. The Tax Reform No. 3 Bill 2026, passed by the House of Representatives on 29 October 2026 and not yet law, would exempt a newly built home.
Dates are easier to hold than to apply. If you’d like to see how they land on what you own and what you plan next, a Building Pathways lays each step out on your own numbers.
Nicholas Lockhart
Negative gearing after 2026: what changed, and who it touches →
Law as at 1 November 2026; the bill as introduced on 14 October 2026 and passed by the House of Representatives on 29 October 2026.