What the 2026 Budget Tax Changes Mean for Property Investors, And Your Loan
The 2026 Federal Budget has landed, and if you own an investment property or are thinking about buying one, there are some real changes worth understanding before you make your next move.
The headlines have mostly focused on the Capital Gains Tax. But here’s the thing: a lot of investors are missing a much quieter opportunity sitting right underneath their noses. Depreciation.
What’s Actually Changing With CGT and Negative Gearing?
From 1 July 2027, the Federal Government plans to replace the current 50% CGT discount with an inflation-based indexation method. On top of that, a minimum 30% tax rate will apply to capital gains. Negative gearing will also be limited to new builds only for investors who buy after Budget night.
If you already own an investment property, your current arrangements are protected; the changes are prospective. And new residential builds get a special carve-out, meaning investors in new properties can still choose between the old 50% discount or the new indexation method.
The Depreciation Opportunity Most Investors Are Overlooking
Here’s something that often gets buried in the noise: depreciation is still fully available as a tax deduction for property investors. The budget changes don’t touch it.
And yet, a surprisingly large number of investors either don’t claim depreciation at all, or they underclaim it. That’s money left on the table every single year.
Depreciation covers the wear and tear on the physical structure of your property investors and the fixtures inside it, things like carpets, appliances, blinds, hot water systems.
New Build vs Established Property: The Numbers May Have Shifted
With negative gearing now heading toward new builds only (post-Budget night purchases), the financial case for buying a new property investors has genuinely strengthened for investors.
New builds typically offer stronger depreciation claims because everything inside them is brand new. Higher depreciation means a better after-tax cash flow position, which, when rates and repayments are where they are right now, matters a lot.
If you’ve been eyeing an established property and comparing it to a new build, it’s worth running the numbers again. The tax treatment difference alone could shift which option stacks up better for your situation.
Ready to Take a Closer Look?
At OM Financials, we help investors across Sydney work through exactly this kind of situation, understanding how changes in the market or tax landscape affect the loan side of the equation, and what options are actually available.
Our brokers can help compare investment loan options, review borrowing capacity and discuss how different loan structures may fit your circumstances.
Tax advice should be obtained from a qualified tax professional because the impact of the 2026 Budget changes will depend on individual circumstances.
Speak with our brokers today to understand your borrowing power and options. You can book your free consultation here, or call us directly on 0478 876 967.
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Frequently Asked Questions
When do the 2026 negative gearing changes start?
The Government’s Budget documents state that the changes are scheduled to apply from 1 July 2027.
Do the changes affect properties I already own?
The Government states that properties held before the 12 May 2026 Budget announcement are protected from the negative gearing changes.
Are new builds treated differently?
Under the proposed arrangements, negative gearing remains available for eligible new residential builds.
Should I speak to a tax adviser?
Yes. Property tax outcomes depend on your individual circumstances, ownership structure and the property involved. A qualified tax professional can explain the tax implications of a particular investment.