Negative gearing has been one of the key talking points from this year’s Federal Budget.
That makes sense.
It is one of those policy areas that can shape how people think about property, particularly investors. It can also get technical quickly, so the detail matters.
In the 2026–27 Federal Budget, the Government announced proposed changes that would limit negative gearing for residential property to new builds from 1 July 2027. Existing investment properties held before Budget night — 7:30pm AEST on 12 May 2026 — would remain under the current rules, while investors who buy eligible new builds would still be able to deduct losses from other income.
The proposed changes still need to go through Parliament. A bill only becomes law once it is passed by both Houses of Parliament and receives Royal Assent.
These are tax settings, and everyone’s situation is different. Buyers and investors should seek independent financial or tax advice before making property decisions.
At a broader level, though, the message is clear enough.
New builds are now a bigger part of the housing conversation.
Negative gearing generally refers to a situation where the costs of an investment are greater than the income it earns.
For property, this usually means the deductible costs of owning a rental property are higher than the rent it brings in.
For many investors, the Budget announcement has raised a simple question: what happens next?
The answer will depend on the final law and each person’s circumstances. But broadly, the proposed changes are designed to put more focus on new housing.
That distinction matters.
Under the Budget material, new builds are residential properties that genuinely add to housing supply.
That can include homes built on vacant land, as well as projects where existing properties are demolished and replaced with a greater number of dwellings. A new apartment, townhouse or newly built home may be relevant, provided it meets the eligibility settings.
The Budget material also notes that knock-down rebuilds or substantial renovations that do not increase supply would not be eligible. A new build also generally cannot have been previously sold, unless it was first owned by the builder and not occupied for more than 12 months.
That is why the detail matters.
Not every new-looking property will necessarily qualify. Buyers and investors should check the official guidance and seek advice before making decisions.
New homes do something established homes cannot.
They add to the total number of places available for people to live.
And when the national conversation is about housing supply, new builds, townhouses, apartments and mixed-use communities become especially important.
They give people more options.
And having options matters.
A first-home buyer might be looking for a way into the market. A family may need more space. A downsizer may want something easier to manage. An investor may be looking at long-term rental appeal.
People need different types of homes at different stages of life.
No single type of housing can solve the challenge on its own.
At Cedar Woods, that housing choice is reflected across a diversified portfolio of communities, including land, townhouses, apartments and mixed-use projects across Western Australia, South Australia, Victoria and Queensland.
Under the Government’s proposed changes, new builds can continue to be negatively geared before and after 1 July 2027.
That is why buyers and investors should check the detail carefully and seek advice before making decisions.
Policy can help focus attention.
But policy by itself does not build homes.
New housing still needs serviced land, infrastructure, clear planning, approvals, skilled workers, construction capacity and a mix of housing types for different buyers.
This is where the bigger housing discussion comes back to delivery.
The Federal Budget included a $2 billion Local Infrastructure Fund to help deliver essential infrastructure for new housing, including water, power, sewerage and roads. State Budgets are also pointing in a similar direction. In Western Australia, for example, the 2026–27 Budget included funding to extend and broaden the off-the-plan transfer duty concession.
Those measures speak to the same practical point.
If more attention is going toward new builds, the question becomes: how do we get more of those homes planned, approved, serviced and built?
That takes time. It also needs coordination between governments, developers, builders, consultants and communities.
For property investors, the proposed changes to negative gearing make the status of new builds more important.
But tax is not the only thing to think about.
Location still matters. So does the type of property, rental appeal, holding costs, timing, broader demand and the quality of the local community.
A new build might fit the proposed rules, but it still needs to make sense as a property choice.
That means looking beyond the policy headlines and asking practical questions.
Is the home in a well-connected area? Is there access to transport, shops, schools, jobs and open space? Is the property right for the people likely to live there? Does the community support long-term liveability?
Those questions still matter.
For buyers more broadly, the Budget is a reminder to consider the whole picture.
Government policy can influence confidence, timing and the types of homes people look at. But the basics still matter.
Here are some useful questions to ask:
The goal is not to react to a single policy change.
It is to understand the settings, ask the right questions and choose a home or investment that works over the long run.
One reform alone will not solve Australia’s housing challenge.
It will take infrastructure, planning, construction capacity, skilled workers, a mix of housing types and long-term delivery.
The proposed changes to negative gearing are one part of the bigger picture. They put more attention on new builds, but the real challenge is turning that focus into homes, neighbourhoods and communities.
At Cedar Woods, we focus on creating new communities across Western Australia, South Australia, Victoria and Queensland. Our projects include land, townhouses, apartments and mixed-use communities for different stages of life.
Across our state portfolios, that broader mix plays an important role in supporting housing choice. Whether it is land for growing families, apartments for lower-maintenance living, or mixed-use communities that bring homes closer to amenity, the common thread is the same: new housing still needs to be planned, serviced, approved and delivered.
We are not giving tax advice. But if policy settings place more focus on new housing, the bigger question is how that housing is planned, serviced, approved and delivered.
For buyers, investors and stakeholders, the message is clear.
Policy settings are important.
But good places to live still need to be planned, serviced, built and delivered.
Explore Cedar Woods communities in Western Australia, South Australia, Victoria and Queensland, including land, townhouses, apartments and mixed-use communities designed for real life.
This article is general information only and does not constitute financial, tax or legal advice. Buyers and investors should consider their own circumstances and seek independent professional advice before making property decisions.