Australia to reform negative gearing and capital gains tax

Proposed reforms to negative gearing and capital gains tax are set to change the residential property landscape in Australia. Starting 1 July 2027, negative gearing for residential property will be restricted to eligible new builds. Investors purchasing established properties following the 2026 Budget announcement will lose the ability to offset property losses against salary or other non-property income, though existing investments will be protected by transitional arrangements.

These changes aim to incentivize investment in new housing to increase supply. Beyond individual landlords, the reforms are expected to impact broader business supply chains, including developers, builders, engineers, and various professional services. For regions like Western Sydney, the success of these policies may depend on whether infrastructure and planning capacity can meet the potential increase in private capital directed toward new residential developments.