A plain-English summary of official information for planning purposes only. It is not financial, tax or legal advice. Eligibility depends on your circumstances, and rules and caps change. Check the official sources below and speak to a qualified adviser, accountant or lender before making decisions.
Summary
| Rule or scheme | What it does | When |
|---|---|---|
| Negative gearing | Limited to new builds for properties bought after 7:30pm AEST 12 May 2026 | From 1 July 2027 |
| Capital gains tax | 50% discount replaced by CPI indexation and a 30% minimum tax (new builds can keep the 50% discount) | Gains accruing from 1 July 2027 |
| Help to Buy | Government takes up to 30% equity in an existing home, or up to 40% in a new one; 2% deposit | Open now |
| 5% Deposit Scheme | 5% deposit with no lenders mortgage insurance, no income caps | Since 1 October 2025 |
| QLD first home owner grant | $30,000 for a new home valued under $750,000 | Contracts to 30 June 2030 |
| QLD first home stamp duty | No transfer duty on a new first home, or on vacant land to build one | Contracts from 1 May 2025 |
| QLD Boost to Buy | State takes up to 30% equity in a new home, or 25% in an existing one; 2% deposit; up to $1 million | Round 2 open (SEQ places exhausted) |
1. Negative gearing is limited to new builds
Until now, a rental loss (rent below interest and costs) could reduce tax on salary and wages. From 1 July 2027, that only continues for new builds and for properties already held on Budget night.
| When the property was bought | Negative gearing |
|---|---|
| Held before 7:30pm AEST 12 May 2026 (including contracts signed but not settled) | Can be negatively geared as before, until sold |
| Established home bought between 12 May 2026 and 30 June 2027 | Can be negatively geared until 30 June 2027, not after |
| Established home bought from 1 July 2027 | Rental losses only offset residential property income and capital gains; excess carried forward |
| New build, bought at any time | Can still be negatively geared against salary and other income |
Losses that cannot be used are not lost: they carry forward to offset future residential property income. The change applies to individuals, partnerships, companies and most trusts; super funds (including SMSFs) and widely held trusts are excluded. Commercial property and shares are not affected.
2. Capital gains tax: indexation and a 30% minimum
From 1 July 2027 the 50% capital gains discount is replaced, for individuals, trusts and partnerships, by two things:
- Indexation: the cost base rises with the Consumer Price Index, so only the real (after-inflation) gain is taxed, as it was between 1985 and 1999.
- A 30% minimum tax on real capital gains. People already taxed at 30% or more are not affected. Age Pension and JobSeeker recipients are exempt in the year they receive a payment.
Only gains that accrue after 1 July 2027 are affected. For an asset held on that date, the gain up to 1 July 2027 still gets the 50% discount, and the new rules apply to growth after it. The value on 1 July 2027 can come from a valuation or an ATO formula. The main residence stays exempt.
Investors in a new build can choose either the 50% discount or indexation with the minimum tax when they sell.
Worked example: how the new rule works
An investor buys an established home for $800,000 in July 2027 and sells it ten years later. The home grows 6% a year and inflation (CPI) averages 3% a year.
| Sale price after 10 years (6% a year) | $1,432,678 |
| Nominal gain (sale price minus purchase price) | $632,678 |
| Old rule: 50% discount, so half the gain is taxed | $316,339 |
| Purchase price indexed by CPI (3% a year for 10 years) | $1,075,133 |
| New rule: real gain taxed (sale price minus indexed cost) | $357,545 |
| Seller's tax rate | Tax, old rule | Tax, new rule | Difference |
|---|---|---|---|
| 47% (top rate) | $148,679 | $168,046 | +$19,367 |
| 32% (middle rate) | $101,228 | $114,414 | +$13,186 |
| 16% (low income in the year of sale, e.g. retired) | $50,614 | $107,264 | +$56,650 |
The last row is where the 30% minimum bites: someone who waits to sell in a low-income year no longer pays 16% on half the gain. The real gain is taxed at no less than 30%.
The result depends on growth versus inflation. If the same home grew only 4% a year (sold for $1,184,195), the real gain would be $109,062 and a top-rate seller would pay about $51,259 under the new rule against $90,286 under the old. Indexation favours slow-growing assets; the 50% discount favoured fast-growing ones.
If you already own the property on 1 July 2027
Bought in 2020 for $600,000, worth $900,000 on 1 July 2027, sold in July 2032 for $1,100,000:
| Gain up to 1 July 2027 ($900,000 − $600,000), old rule: 50% discount | $150,000 taxed |
| Gain after 1 July 2027: $1,100,000 − ($900,000 indexed by CPI for 5 years = $1,043,347) | $56,653 taxed |
| Total taxable gain (was $250,000 under the old rule alone) | $206,653 |
New builds: pick the lower
For a new build, the investor works out both and chooses. In the first example at the top rate, that means $148,679 using the 50% discount instead of $168,046, so new-build investors are no worse off than today.
Simplified illustration: one marginal rate applied to the whole gain, 47% and 32% include the 2% Medicare levy, and no costs added to the cost base (stamp duty, legal fees and improvements would reduce the gain). Growth and CPI rates are assumptions. The ATO will publish the official indexation method and tools.
3. What counts as a new build
- A home built on vacant land, or where existing homes are demolished and replaced with more homes
- Not previously sold, unless first owned by the builder and not occupied for more than 12 months
- Knock-down rebuilds and renovations that do not add homes do not count
- Only the first buyer gets the new-build treatment. Later buyers of the same home cannot negatively gear it or use the 50% discount
A house-and-land build in a new estate, like the Greenbank construction analysis, is a new build under this definition.
4. Help to Buy: the government owns part of the home
The Australian Government's shared equity scheme, run by Housing Australia.
| Government share | Up to 30% of an existing home, up to 40% of a new home |
| Your deposit | At least 2% |
| Income caps (2026–27) | $103,000 single; $165,000 joint or single parent |
| Places | 10,000 a year |
| Who | Owner-occupiers only. You must live in the home; renting it out is not allowed |
| Paying it back | No interest on the government share. Buy it back in part or in full at any time, or when you sell, at the home's value at that time |
| Price caps | Set by location; check the Housing Australia tool |
Because the government's share is repaid at the home's value when you pay it back, it shares in any rise or fall in value.
5. The 5% Deposit Scheme
Since 1 October 2025, first home buyers can buy with a 5% deposit (single parents 2%) without lenders mortgage insurance, with no income caps and no waitlist. Property price caps apply: in Queensland $1,000,000 in Brisbane and regional centres and $700,000 elsewhere; Sydney $1,500,000; Melbourne $950,000; Perth $850,000; Adelaide $900,000.
6. Queensland: grants, stamp duty and Boost to Buy
- First home owner grant: $30,000 for a new home valued under $750,000. The June 2026 State Budget continued it for contracts from 1 July 2026, reported to run to 30 June 2030.
- No stamp duty on a new first home: a full concession with no value cap for contracts from 1 May 2025. You must move in within 1 year of settlement.
- No stamp duty on vacant land for a first home: also full, with no value cap, from 1 May 2025. You must build and move in within 2 years of settlement.
- Boost to Buy: the state takes up to 30% equity in a new home or 25% in an existing one, with a 2% deposit, for homes up to $1 million, through one approved lender. Half the places are for regional Queensland; south-east Queensland places in Round 2 are exhausted.
- From 1 August 2026: home concessions are limited to Australian citizens, permanent residents and specified foreign retirees.
What it means for house and land
A new build is now the only residential property that can be negatively geared against salary, and it keeps the option of the 50% capital gains discount. The investor in the Greenbank analysis, buying land and building a new home, keeps both.
A first home buyer in the same estate would pay no stamp duty on the land or the home. But at about $1.06 million for land and build, it is above the $750,000 grant limit and the $1 million caps for Boost to Buy and the 5% Deposit Scheme. The schemes fit smaller or cheaper homes.
Investor demand is expected to shift from established homes to new builds from July 2027. Treasury estimates the changes will add about 75,000 owner-occupiers over ten years.
Sources
- Budget 2026–27: Negative Gearing and Capital Gains Tax Reform (fact sheet)
- Treasury: Budget 2026–27 tax system changes
- ATO: Reforming negative gearing and capital gains tax
- Parliament of Australia: Treasury Laws Amendment (Tax Reform No. 1) Bill 2026
- First Home Buyers (Housing Australia): Help to Buy
- First Home Buyers: Help to Buy income thresholds 2026–27
- First Home Buyers: 5% Deposit Scheme and property price caps
- Queensland Treasury: Boost to Buy
- Queensland Revenue Office: State Budget 2026
- Queensland Revenue Office: first home owner grant eligibility
- Queensland Revenue Office: first home (new home) concession
- Queensland Revenue Office: first home vacant land concession
- Queensland Revenue Office: changes to home concessions from 1 August 2026
Everything on this page is for educational and informational purposes only. Costs, prices, interest rates, rules and government schemes change over time, and the figures shown are approximate examples that may already be out of date. Nothing here is financial, tax, legal, building or professional advice, a recommendation or a quote. Do your own research, get written quotes and seek advice from qualified professionals before making any decision.