This is the question a lot of property investors are asking right now. On the surface, it feels like a simple question. If the rules are changing, surely it makes sense to get in before they do. But property is rarely that simple. The proposed changes to negative gearing and capital gains tax could absolutely affect investor decision-making.
From 1 July 2027, the Government has announced plans to limit negative gearing to new builds, while established residential properties purchased after Budget night will have a different treatment for losses.
That makes timing important. But timing is not the only thing that matters.
What changes from 1 July 2027?
From 1 July 2027, investors who buy new builds are expected to retain access to negative gearing against other income. For established properties purchased after Budget night, losses will be able to be deducted against residential property income, with unused losses carried forward, but they will not be deductible against income such as wages.
That is the part investors need to understand as it does not necessarily mean established property becomes “bad”; it means the cash flow and tax treatment may change.
If you are relying on a tax refund to make a property affordable each year, that is a big deal. If the property is close to neutral, positively geared, or part of a broader strategy with strong income, equity and buffers, the impact may be different.
Buying before the deadline may not solve everything
There is a natural temptation to rush. No one wants to feel like they missed the window, but buying before 1 July 2027 only helps if the property itself is worth buying.
A poor asset does not become a good asset because of a tax rule. A bad location is still a bad location. Weak rental demand is still weak rental demand. An overextended borrowing position is still an overextended borrowing position. If the numbers do not work, the deadline does not fix them. The right property still matters most Before making any decision, investors need to look beyond the tax treatment.
Ask yourself these questions first:
- Is there strong rental demand?
- Is the property in a market with growth drivers?
- Can I comfortably hold it if rates stay higher for longer?
- What happens if the property is vacant for a few weeks?
- Can I still borrow again after this purchase?
- Is this property helping me build a portfolio, or blocking the next step?
This is where many investors go wrong because they think about the purchase in isolation. A strategic investor thinks about the next move before they make this one.
New builds may get more attention
The proposed rules are clearly designed to encourage more investment into new housing supply. New builds are expected to retain more favourable negative gearing treatment from 1 July 2027. That could make new properties more attractive for some investors, but new does not automatically mean better. You still need to consider land value, price, location, rental yield, depreciation, builder quality, valuation risk and resale demand.
Some new builds will be excellent investments, whereas some will not. The tax treatment is one part of the decision, not the whole decision.
Established properties are not automatically off the table
There is still a case for established property. Established homes often come with larger land components, more scarcity, more renovation potential and stronger owner-occupier appeal. In many growth markets, that still matters. The issue is that after Budget night, investors buying established residential property need to be more conscious of how losses will be treated from 1 July 2027.
If a property is heavily negatively geared, the investor may need to fund more of that shortfall from their own pocket. That could affect holding power, and holding power is everything.
Do not ignore capital gains tax
The Budget also proposes replacing the current 50% CGT discount with an inflation-based approach and introducing a minimum 30% tax on gains from 1 July 2027. The Government has said the reforms will only apply to gains arising after 1 July 2027. For investors, this means the future sale position also deserves attention. When you buy, you should already be thinking about how the asset may perform over time, what the after-tax outcome could look like and how it fits into your overall wealth strategy.
A good purchase is not just about getting in, but it’s about knowing what the asset is meant to do for you. The biggest mistake is rushing without finance clarity. A lot of investors start with the property. They look at suburbs, watch listings, speak to agents and then talk to a broker at the end. That order is backwards.
Before buying in this environment, you need to understand:
- What you can actually borrow
- How different lenders will assess you
- Whether your current debt structure is helping or hurting you
- How much usable equity you have
- What buffers you need
- Whether this purchase keeps the door open for the next one
Borrowing capacity is not just about this purchase. It is about your future options.
So, should you buy before 1 July 2027?
Maybe. But not just because of the date. Buying before 1 July 2027 may make sense if the asset is strong, the numbers work, your borrowing position is clear and the purchase supports your longer-term strategy.
It may not make sense if you are rushing, stretching too far, or buying a property you would not otherwise buy just to get ahead of a tax change. The deadline matters, but discipline matters more.
From our perspective
The window before 1 July 2027 may create opportunity for some investors, but it also may also create pressure. That pressure can lead to rushed decisions, and those decisions in property can be expensive. If you are considering buying before the proposed changes begin, start with the finance strategy first.
Know your borrowing capacity. Know your buffers. Know the impact on your next move. Then look at the property. Because the goal is not just to buy before a deadline, but it’s to buy well.
General information only. This article does not take into account your personal financial, tax or legal circumstances. Please speak to your broker, accountant and financial adviser before making any decision.
