Property investors have had more tax change in 2026 than in the previous twenty years. Negative gearing has been restricted for residential property bought after Budget night. The 50% CGT discount is being replaced for growth from 1 July 2027. SMSFs can no longer take on new borrowing to buy residential property. And the old question of which name to buy in now has different answers depending on when you buy, what you buy and which state it's in.
This page explains what's changed, what hasn't, and how we work with investors.
What problems do property investors bring to us?
- Bought in the wrong name. A property bought in a family trust that makes a $15,000 loss every year, with no way to use it. Or a high-income spouse who owns the positively geared property while the low-income spouse owns the one making a loss.
- Land tax nobody planned for. A trust bought in NSW or Victoria and now pays land tax from the first dollar of land value, or a foreign beneficiary clause that triggers surcharge land tax.
- Mixed loans. A redraw used for a car or holiday, so part of the interest is no longer deductible and nobody knows which part.
- Missed deductions. No depreciation schedule on a near-new apartment, or repairs and improvements lumped together.
- No plan for 1 July 2027. Owners unsure whether to sell, hold or restructure, and no idea what valuation evidence they'll need.
What do we do for property investors?
| Area | What we do |
|---|---|
| Before you buy | Model ownership in each name or entity: after-tax cash flow, negative gearing status, land tax, duty, CGT on sale |
| Annual returns | Rental schedules for each property, individual, trust, company and SMSF returns |
| Deductions | Interest apportionment, repairs vs improvements, depreciation and capital works |
| 30 June 2027 | Identify each property's transition position, organise valuations or apportionment, keep the records |
| State taxes | Land tax and duty checks before purchase; surcharge and trust deed issues flagged |
| Structuring | Moves between entities costed: CGT, duty, land tax and finance |
| SMSF property | Fund accounts and returns, LRBA compliance, related-party lease checks, coordinated independent audit |
Our capital gains tax agent works through the discount, indexation and the 1 July 2027 transition for each property. Our historical property value agent gives an indicative market value at a past date, which helps decide where a formal valuation is worth paying for. Our depreciation agent prepares the schedules from your quantity surveyor's report. A qualified accountant reviews every result.
Which numbers should a property investor track?
| Measure | What it tells you | How it's worked out | Watch for |
|---|---|---|---|
| Gross rental yield | Income relative to value | Annual rent ÷ property value | Yield falling as values rise and rent stalls |
| Net yield | Return after holding costs | (Rent − rates, insurance, land tax, management, repairs) ÷ value | Land tax and strata increases |
| Pre-tax cash flow | Whether the property costs you money each month | Rent − all costs including interest and principal | Interest rate rises |
| After-tax cash flow | What it really costs you | Pre-tax cash flow + tax saved (or − tax paid) | Quarantined losses from 1 July 2027 remove the tax saving |
| Loan-to-value ratio | Debt against the property | Loan ÷ current value | Refinancing pressure |
| Deductible interest share | Clean versus mixed borrowing | Interest on investment purpose ÷ total interest | Redraws for private use |
| Unrealised gain (pre and post 1 July 2027) | Tax on sale | Value − cost base, split at the transition date | Records to support the 1 July 2027 value |
What are the tax rules property investors need to know now?
Negative gearing for properties bought after 12 May 2026
This is law. Under the Tax Reform No. 1 Act 2026, net rental losses on residential properties acquired after 7.30 pm AEST on 12 May 2026 are quarantined from 1 July 2027. They can't be offset against salary or business income, but they carry forward and can reduce the net capital gain on residential property later. Properties bought before that time keep full negative gearing. New residential dwellings and exempt affordable housing are outside the quarantine, although the detailed definition of a new residential dwelling is still being finalised.
So the date of your contract and whether the property is new or established now drive the after-tax numbers. Our guide to the negative gearing changes works through the detail.
CGT from 1 July 2027
This is law. For individuals, trusts and partnerships, the 50% CGT discount is replaced by cost-base indexation for gains accruing from 1 July 2027, and individuals face a new 30% minimum tax on certain capital gains from that date. Per the ATO:
- Assets you hold are treated as disposed of and reacquired just before 1 July 2027. Growth before then keeps the old rules, and the tax is deferred until you actually sell.
- For real estate you'll generally need the market value immediately before 1 July 2027, or an alternative apportionment method the Government is still developing.
- You can choose to keep the 50% discount for a new residential dwelling or property used for affordable housing.
- The main residence exemption is unchanged.
You don't need to sell to protect past growth. You do need good evidence of value. Our guides to the CGT discount changes and the 30% minimum tax on capital gains explain the mechanics.
Land tax on trusts and companies
Land tax is a state tax, charged on the land value you hold at a set date each year, and the rules for trusts are where investors get caught.
| State | How trusts are treated (summary) |
|---|---|
| NSW | Most discretionary and many unit trusts are "special trusts": no tax-free threshold, taxed at the general rate from the first dollar. Surcharge land tax for foreign persons can apply to a discretionary trust unless its deed irrevocably excludes foreign beneficiaries |
| Victoria | Land held on trust is generally taxed on a separate trust surcharge scale that starts at a much lower land value than the general scale, unless an exemption applies |
| Queensland | Companies and trusts pay land tax from $350,000 of taxable land value, compared with $600,000 for individuals |
| South Australia | Land held on trust is generally assessed at trust rates with a much lower threshold than individuals, unless the trust is excluded |
| Other states and territories | Rules and surcharges differ; check before buying |
A trust may still be the right choice for asset protection or for positively geared property, but the land tax cost belongs in the calculation before you buy, not after. Our state taxes service handles land tax and duty questions in every state.
Depreciation and capital works
- Capital works. The cost of constructing the building and structural improvements is usually deductible at 2.5% a year for residential buildings built after 15 September 1987.
- Plant and equipment. Individuals and most trusts can't claim depreciation on previously used fittings in residential rental property bought after 9 May 2017. New fittings you buy yourself are still claimable.
- Repairs vs improvements. Restoring something to its original condition is a repair, deductible now. Improving it is capital. Work done straight after purchase to fix existing defects is usually capital.
Interest and loans
Interest is deductible based on what the borrowed money was used for. Keep investment and private borrowing in separate loan splits, use an offset account rather than paying down and redrawing, and keep records of every drawdown.
Which ownership structure suits a property investor?
| Owner | Rental losses | CGT on sale | Land tax | Asset protection | Best fit |
|---|---|---|---|---|---|
| Individual (one name) | Can offset other income (subject to the 12 May 2026 rules) | Discount or indexation; 30% minimum tax on post-2027 gains | Individual threshold | Weak; exposed to your creditors | Negatively geared property, higher-earning owner with low risk |
| Joint names | Split by ownership share | As above, per owner | Joint and individual assessments | Weak | Couples with similar incomes |
| Discretionary trust | Trapped in the trust | Discount or indexation; proposed trust minimum tax from 2028 is a Bill, not law | Often higher (see above) | Stronger | Positively geared property, families with liability risk |
| Company | Trapped in the company | No CGT discount; company rate | Company rules, grouping | Stronger | Rarely for residential property; sometimes for commercial |
| SMSF | Within the fund | Concessional super rates | Varies | Generally protected | Long-term holding, especially business real property; needs licensed advice |
The proposed 30% minimum tax on discretionary trust income from 1 July 2028 is in the Tax Reform No. 3 Bill 2026, which is not law. We model it for trust investors but don't restructure on the strength of a Bill. See our guide to the discretionary trust tax changes.
SMSF property
An SMSF can own residential or commercial property, but it must be for retirement purposes only: you can't live in it, rent it to relatives or holiday in it. Since 10 August 2026, new SMSF borrowing over real property must be for business real property; earlier residential arrangements and their refinancing are grandfathered. Business real property can be leased to your own business at market rent. Whether an SMSF suits you is a question for a licensed financial adviser; we prepare the fund's accounts and returns, check the property rules and coordinate the independent audit. Read more in our SMSF property guide.
How do we work with property investors?
- Free strategy call about what you own, what you plan to buy and what worries you.
- Portfolio map. Every property with owner, contract date, new or established, loan splits and state.
- Changes check. Which properties are affected by the negative gearing rules, and what each needs for 30 June 2027.
- Before each purchase. A short model of ownership options with after-tax cash flow, land tax and CGT.
- Every year. Returns for every owner, depreciation, interest apportionment and land tax checks.
- Sale or restructure. CGT calculated under the right rules, timing planned.
Everything runs on Nagaris. You answer questions and upload documents from your phone, with no portal password. The AI agents draft; qualified accountants review and sign off.
What does it cost?
Most individual investors only need their annual returns, quoted as a fixed fee once we know how many properties and entities are involved. Investors with trusts, companies or an SMSF, or who want help before each purchase, are often better on an ongoing plan; see our pricing page. If you have one or two straightforward rentals in your own name, a simple tax return may be all you need, and we'll tell you that.
What should you send us?
- A list of properties with addresses, owners, purchase contract dates and prices
- Settlement statements for each purchase (and sale, if any)
- Loan statements for the year, showing every drawdown and redraw
- Rental statements from your property manager
- Depreciation schedules, or the build or renovation dates if you don't have one
- Land tax assessments
- Trust deeds, company details and SMSF documents if you use them
For the full list of rental deductions, see our guide to rental property tax deductions. If your properties sit alongside a business, our asset protection service looks at the whole picture.
Frequently asked questions
Should I buy my next investment property in my own name or a trust?
It depends on whether the property will make a loss in the early years, your income, your state's land tax rules and your asset protection needs. A trust can't pass a rental loss to you, and in several states it pays more land tax. Personal names usually suit negatively geared property; trusts suit positively geared property and families with liability risk. We model both before you sign.
Does the new negative gearing rule affect properties I already own?
Not if you bought them before 7.30 pm AEST on 12 May 2026. The quarantining applies to residential properties acquired after that time, from 1 July 2027, unless the property is a new residential dwelling (a definition still being finalised) or exempt affordable housing. Keep your contract to prove the date.
Do I have to sell before 30 June 2027 to keep the 50% CGT discount?
No. Under the law, assets you hold on 1 July 2027 are treated as sold and bought back at market value just before that date, so growth up to then keeps the old rules and the tax is deferred until you actually sell. What you need is evidence of the market value immediately before 1 July 2027, or to use the apportionment method the Government is developing.
Can my SMSF still borrow to buy a residential investment property?
Not under a new arrangement. Since 10 August 2026, new limited recourse borrowing arrangements over real property must be for business real property. Residential LRBAs entered into earlier, or where contracts exchanged earlier, are grandfathered, including refinancing. An SMSF can still buy residential property outright with its own money.
Is it worth getting a depreciation schedule?
For a newer property, usually yes, because capital works deductions on the building and any new fittings can be substantial over many years. For an older property bought second-hand, the deductions may be small, since most individuals can't claim depreciation on second-hand fittings in residential property. A quantity surveyor's quote often tells you whether it's worth it.
Can I claim interest if I redraw on my investment loan for personal use?
Not on the redrawn amount. Interest is deductible according to what the borrowed money is used for, not what secures the loan. Mixing private and investment borrowing in one loan makes the calculation messy and reduces your deduction, which is why split loans and offset accounts are worth setting up properly.
Official sources
General information only, current as at 18 October 2026. It is not personal tax, legal or financial product advice and doesn't take your circumstances into account. Talk to us before you act. Where a recommendation needs a licensed financial adviser or a solicitor, we work alongside them.