The biggest shake-up to property investor tax in decades is now law, and it has become a fresh election battleground. On 19 October 2026, One Nation leader Pauline Hanson pledged to unwind Labor's negative gearing and capital gains tax (CGT) changes, calling them "destructive budget experiments".
If you own an investment property, or are weighing up your first one, the rules you plan around could look very different depending on who governs after the next federal election. Here's what has changed, what One Nation is promising, and how to make smart borrowing decisions while the politics plays out.
What the 2026 budget changed for property investors
Treasurer Jim Chalmers announced the reforms in the 12 May 2026 Federal Budget. The bill passed Parliament on 25 June 2026 with Greens support, and most changes start on 1 July 2027.
Negative gearing limited to new builds
Established residential properties bought after 7:30pm AEST on 12 May 2026 can no longer have rental losses offset against wages from 1 July 2027.
Properties held before that time are fully grandfathered, including contracts signed but not yet settled.
New builds still qualify, such as off-the-plan apartments and homes built on vacant land, but generally only for the first buyer.
Unused losses can be carried forward, but only against future residential property income.
The 50% CGT discount replaced
From 1 July 2027, the 50% CGT discount is replaced by inflation (CPI) indexation of your cost base.
A 30% minimum tax applies to real capital gains on assets held 12 months or more.
For assets already owned, the gain is split: the 50% discount applies up to 1 July 2027, and the new rules apply after that.
Trusts and SMSFs
A 30% minimum tax on discretionary trusts is set to start from 1 July 2028.
As part of the Greens deal, limited recourse borrowing arrangements (LRBAs) for residential property in SMSFs are being banned.
What One Nation is promising
One Nation says it would reverse the core of Labor's reforms if it holds the balance of power after the next election.
Notably, the pledge isn't a full return to the old system. The two-property cap means negative gearing would still be limited compared with pre-budget rules, which Hanson said gave "unlimited taxpayer concessions for property tycoons".
Hanson also pointed to falling prices since the reforms were announced. She cited a projected $30 billion revenue hit over four years and about 34,000 first home buyers at risk of negative equity, including more than 1,100 households who bought through the expanded 5% Deposit Scheme.
What this means for property investors
The short answer: plan around the law as it stands today, not around election promises. One Nation would need to hold real sway in a future Parliament, and any reversal would need new legislation passed by both houses.
That said, the pledge adds uncertainty that affects decisions now:
Buying established property: Under current law, rental losses on established property bought since budget night can't reduce your taxable wages from 1 July 2027. Your loan has to stack up on rental income and your own cash flow, not tax refunds.
Buying new builds: New properties keep full negative gearing for the first buyer, which is shifting investor demand toward off-the-plan and house-and-land packages.
Holding grandfathered property: Properties owned before 12 May 2026 keep the old negative gearing rules. Selling and re-buying would lose that status, so think carefully before restructuring.
Planning a sale: Gains accrued before 1 July 2027 still get the 50% discount. Timing a sale, and getting a valuation near that date, could matter.
SMSF investors: With LRBAs for residential property being banned, borrowing inside super to buy property is largely off the table.
Your borrowing power may change too
Lenders assess serviceability on your income and expenses. Where negative gearing no longer reduces your tax, your after-tax cash flow on an investment can be lower, which can affect how much you can comfortably borrow. A broker can model both scenarios before you commit.
What to do now
Check which rules apply to each property you own. Note purchase dates against the 12 May 2026 cut-off.
Stress-test any new purchase without tax benefits. If an established property only works with negative gearing, it may not suit the current rules.
Compare new builds carefully. Tax treatment is only one factor; location, build quality and resale demand still drive returns.
Review your loan structure. Interest-only versus principal-and-interest, offset accounts and debt recycling all look different under the new rules.
Talk to your accountant and your broker together. Tax strategy and lending strategy should line up.
How IQ Loans can help
Whether you're buying your first investment property, adding to your portfolio or refinancing a grandfathered loan, IQ Loans can compare lenders, model your borrowing power under the new rules, and structure your loan to suit your strategy. Book a free chat with our team today.
This article is general information only and does not consider your personal circumstances. It is not tax or legal advice. Speak with a qualified tax adviser before making decisions.
Frequently asked questions
Has negative gearing been abolished in Australia?
No. From 1 July 2027, negative gearing against wage income is limited to new builds and properties held before 7:30pm AEST on 12 May 2026. Losses on other established properties can be carried forward against future residential property income.
When does the 50% CGT discount end?
The discount is replaced from 1 July 2027 with CPI indexation and a 30% minimum tax on real gains. Gains accrued before that date still receive the 50% discount.
What has One Nation promised on negative gearing and CGT?
One Nation has pledged to restore the 50% CGT discount, let all investors negatively gear up to two properties, and scrap the 30% minimum tax on discretionary trusts.
Will One Nation's pledge change the law?
Not on its own. Any reversal would need new legislation passed by Parliament after the next federal election. Until then, the current rules apply.
Does the change affect my borrowing capacity?
It can. Without negative gearing tax benefits, your after-tax cash flow on an established investment property may be lower, which can affect what lenders will approve. A broker can model your options.