Budget night was back in May, and the headlines have long since moved on to the next thing. But if you own, or are considering buying, an investment property, the change itself hasn’t actually happened yet. It lands on 1 July 2027. Between now and then sits a genuine, time-limited window, and it’s worth understanding properly rather than losing track of it.

Here’s what’s actually happening. From 1 July 2027, losses on an established rental property will still be fully deductible, but they won’t offset your salary anymore. Instead, they’ll be ring-fenced against your rental income or residential capital gains and carried forward until used. It’s a quarantine, not a repeal. The distinction matters because the right move for most property investors isn’t to panic. It’s to work out exactly where you sit in the timeline and plan from there.

The change in plain English

• What’s caught: Net losses on established residential property from 1 July 2027 onward.
• What’s exempt: New builds, properties you already hold, and contracts signed before Budget night at 7:30pm AEST on 12 May 2026.
• What still works: Other assets like commercial property and shares are untouched. The rules only apply to established residential real estate.

Which of the three cohorts are you in?

This is the main question that matters, because the answer, and its implications, differ for almost every investor we talk to.

• Cohort A (held before Budget night): Nothing changes. Your existing arrangement is exempt until you sell. The main thing to watch is that a restructure, such as moving title between spouses, could count as a disposal and switch that exemption off. Don’t touch the structure without checking first.
• Cohort B (the current window): Buy an established property any time between Budget night and 30 June 2027, and you can still negative gear it for as long as you hold it before the rules start. That’s the window currently open. It’s not a reason to rush a purchase you weren’t planning, but if a property has been on your radar, now is the time to get it properly modelled.
• Cohort C (buying from 1 July 2027): An established property falls straight into the quarantine. A new build sits outside it entirely, with a genuine choice between the existing 50% CGT discount and the new indexation method on sale. For anyone buying after that date, that’s a real decision to make upfront.

Why this isn’t just a tax story

Negative gearing was never really about the annual refund. It was the mechanism that made a leveraged property affordable to hold long enough for growth to do the work, while rental income quietly chipped away at the mortgage. That strategy still works in full for anyone holding property bought before Budget night, and it still works, for now, for anyone buying before 30 June 2027. After that, the maths changes, and it’s worth working through before you commit.

Expert Corner — Anthony Mufale, Partner, LCI Partners “The clients who get the most out of this window aren’t the ones who rush a purchase to beat the deadline. They’re the ones who get their numbers modelled properly while there’s still time to actually choose. That’s a conversation worth having now, not after you’ve signed anything.”

A clear next step

Detailed drafting is still to come, and we’d caution against restructuring anything on the strength of an announcement alone. Knowing where you stand in this window is worth doing now, while there’s still time to plan rather than react.

If you’d like to talk it through, Anthony and the Advisory team are offering a focused health check on your property position, no jargon, just a clear conversation. Reach out to Anthony at anthony@lciadvisory.com to book a time.