Negative gearing has changed. Why your property now has to pay its way

The May 2026 federal budget brought the biggest change to property investor tax settings in a generation. At the same time, Queensland’s tenancy rules have been rewritten in stages since 2023. Put together, they change what investors need from their property, and from the people managing it.

What’s changed

• Negative gearing. From 1 July 2027, losses on established residential properties bought after 7:30pm AEST on 12 May 2026 can generally only be offset against residential property income or gains, not your salary. Unused losses can be carried forward. New builds keep access to negative gearing.
• Existing investors. Properties held on budget night are grandfathered until they’re sold. Properties bought between budget night and 1 July 2027 can be negatively geared until 1 July 2027.
• Capital gains tax. For individuals, trusts and partnerships, the 50% CGT discount is replaced with cost base indexation and a 30% minimum tax on capital gains, applying to gains that accrue after 1 July 2027.
• Status. The changes are now law, through the Treasury Laws Amendment (Tax Reform No. 1) Act 2026.

Renovations, extensions and granny flats generally don’t turn an existing property into a “new build” for these rules, so check with your accountant before relying on them for tax treatment.

What it means for investors

For anyone buying an established property from here, the old strategy of accepting a loss and claiming it against your wage no longer works in the same way. A property increasingly has to stand on its own cash flow.

That shifts the focus from tax to performance: the rent the property earns, the costs of holding it and the improvements that lift its income and value. Even for grandfathered investors, those are the levers that decide whether a property builds wealth or quietly drains it.

Meanwhile, managing a rental has never been more complex

Queensland’s tenancy reforms have added detail to nearly every part of a tenancy:

• Rent can only be increased once every 12 months per property, so the timing and level of each review matters more.
• Rent bidding is banned, so the rent needs to be priced correctly from day one.
• Rental applications, bonds, entry notice, rent payment methods and minimum housing standards all have new requirements, many with penalties.

It’s easy for a property to fall out of step with the rules, and harder than ever to get the most from it without a plan.

What good management looks like now

Compliance is the minimum. Performance is the goal. In practice that means:

• Rent positioned correctly at the start of every lease, and reviewed on time.
• Vacancy kept low through good presentation and well-timed lease expiries.
• Holding costs reviewed, not just paid: insurance, maintenance, fees and loan structure.
• Good tenants retained, because every changeover costs money.
• Value-add opportunities identified, like an extra bedroom or a second dwelling, where the numbers stack up.

Poor management costs you money. Great management should make you money.

That’s the standard we hold ourselves to at Rentwell. Every client receives an annual Property Performance Review, looking at the property purely as an investment. If you’d like to see how your property stacks up under the new rules, try our cashflow calculator or book a call with our team.

General information only, current as at October 2026. This is not tax or financial advice. Speak to your accountant or a licensed financial adviser about your situation.