What did the 2026 Federal Budget change for negative gearing?
What the quarantine changes, who is exempt, and what to do before 1 July 2027.
Is negative gearing being abolished?
No. The quarantine narrows how rental losses on a defined category of property are used, not whether negative gearing exists. From 1 July 2027, losses on established residential property acquired after the 12 May 2026 cutoff can offset rental income or capital gains, but not salary or other income. New builds and property acquired before the cutoff keep the existing treatment.
Which properties are affected, and from when?
Two dates matter. The 12 May 2026 acquisition cutoff (7:30pm AEST) decides which established properties are inside the quarantine. 1 July 2027 is when the quarantine takes effect. An established property acquired after the cutoff moves to rental-only loss offsetting from 1 July 2027. One acquired before the cutoff does not.
Does the quarantine affect properties I already own?
Only if you acquired established residential property after 7:30pm AEST on 12 May 2026. Property held before that cutoff keeps its existing negative gearing treatment. Even so, the after-tax economics of holding property have shifted, so existing structures still warrant a review against the new framework rather than an assumption that nothing has changed.
What does this change about how I plan a purchase?
For an established property acquired after the cutoff, a projected tax loss no longer shelters other income from 1 July 2027, which changes its after-tax return. New builds keep the more favourable treatment. At mortgage rates around 6.4%, with only 0.8% of suburbs cash-flow positive, the holding decision was already tightening before the tax change layered on top.
What should I do next?
Confirm which of your holdings sit inside the quarantine and which do not, and whether a structure built under the old rules still holds up. The Ramsey Portfolio Stress Tester runs your holdings against five scenarios and returns a Survival Score, which is the fastest way to see where a specific portfolio sits under the new rules.
General advice only. This content does not take into account your personal objectives, financial situation or needs. Ramsey Property Wealth Pty Ltd is a Credit Representative under Australian Credit Licence 389087. Legislative measures are drawn from the Treasury Laws Amendment (Tax Reform No. 1) Act 2026. Seek personalised advice before acting.