How does the 2026 reform treat newly built investment properties?
Why new supply keeps negative gearing, and the after-tax gap versus established stock.
Why do new builds keep negative gearing?
The quarantine that begins on 1 July 2027 targets established residential property acquired after the 12 May 2026 cutoff. New builds sit outside it. The policy intent is to keep negative gearing available where it adds housing supply, rather than where it competes for existing stock. For a new build, the pre-reform negative gearing treatment continues.
What is the difference in treatment between new and established?
For an established property acquired after the cutoff, from 1 July 2027 rental losses can only offset rental income or capital gains, not salary or other income. For a new build, rental losses retain their existing use against other income. That difference changes the after-tax cash flow of holding one versus the other.
Does this change the after-tax case for buying new?
It can. Where two properties have similar rental shortfalls, the new build retains the loss offset against other income while the post-cutoff established property does not from 1 July 2027. That widens the after-tax gap in the new build’s favour, though price, yield, growth prospects, and quality still drive the underlying decision.
How does this interact with the August deadlines?
The new-build treatment is about the 1 July 2027 negative gearing change. It is separate from the 9 August 2026 bare trust deadline and the 10 August 2026 SMSF LRBA change, which concern structures being put in place now. A new-build acquisition inside an SMSF or a bare trust still has to meet those near-term deadlines.
What should I do next?
Compare a planned new-build acquisition against an established alternative on an after-tax basis under the new rules, not the old ones. The Ramsey Portfolio Stress Tester runs the comparison against five scenarios and returns a Survival Score for a specific portfolio.
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.