The 2026–27 Federal Budget, handed down on 12 May 2026, has introduced significant tax reforms that will reshape the property investment landscape across Australia. With changes to negative gearing and capital gains tax (CGT) taking effect in stages, many investors are now reviewing their portfolios and borrowing strategies.

At Financio Lending Solutions in Sydney, our mortgage brokers are helping clients understand these changes and explore flexible financing options to stay ahead.

What’s Changing from 1 July 2027?

Two major reforms will come into effect:

Replacement of the 50% CGT Discount with Cost-Base Indexation The long-standing 50% capital gains tax discount will be removed for properties acquired after the new rules. Instead, investors will be allowed to index the cost base of their property using CPI (Consumer Price Index) to adjust for inflation.
Introduction of a 30% Minimum CGT Floor Even after applying indexation, a minimum effective CGT rate of 30% will apply to capital gains realised on residential investment properties after 1 July 2027.

Real Impact on Long-Term Property Investors

Higher Effective Tax on Gains Long-term investors who have held properties for 10+ years will likely face a higher tax liability compared to the current 50% discount system, especially in periods of high property price growth that outpace inflation.
Reduced After-Tax Returns The combination of indexation and the 30% floor is expected to lower net returns for many investors. This may particularly affect “buy and hold” strategies that rely heavily on strong capital growth.
Shift in Investor Behaviour Many investors may now prioritise cash flow positive properties over high-growth assets, or look to develop and sell new builds (which may still enjoy some concessions).
Portfolio Review Urgently Needed Investors holding properties in trusts, companies, or SMSFs should review their structures, as the impact can vary depending on the entity type.

Who is Most Affected?

Investors planning to sell properties purchased before 1 July 2027 after that date.
High-growth suburbs where capital gains significantly exceed inflation.
Investors currently relying on the 50% CGT discount to boost their retirement nest egg.

Opportunities Still Exist

Despite the changes, property remains a powerful wealth-building asset in Australia. Savvy investors can still succeed by:

Focusing on new builds (which may retain some advantages under negative gearing rules).
Optimising ownership structures (SMSF, discretionary trusts, or company structures).
Improving rental yields through value-adding renovations.
Accessing specialist financing solutions tailored for the new environment.

Financio Recommendation

At Financio, we specialise in helping investors navigate complex tax and lending changes. Whether you hold investments personally, via an SMSF, trust, or company, our team can review your borrowing capacity and recommend tailored financing solutions — including Shariah-compliant Islamic home loans — to optimise your position under the new rules.

The changes take effect from 1 July 2027, but planning should begin now.

Need personalised advice? Contact our specialist team today for a confidential review of how these CGT changes will impact your investment portfolio and borrowing capacity.