What the Budget Changes — and What It Doesn't

Three substantive changes were announced. First, negative gearing on established investment property bought after 12 May 2026 is restricted from 1 July 2027 — losses cannot offset wage income. Second, the 50% CGT discount is replaced with CPI indexation and a 30% minimum rate for post-Budget-night purchases, from 1 July 2027. Third, family trust distributions face a 30% minimum rate from 1 July 2028. budget.gov.au

Properties owned before 7:30pm, 12 May 2026 are grandfathered on negative gearing indefinitely. On CGT, gains accrued before 1 July 2027 keep the 50% discount; gains after use the new method. For first home buyers in Queensland, the $30,000 FHOG is available for contracts by 30 June 2026, reverting to $15,000 after that. QLD Govt FHOG

Important: these are budget announcements, not yet law. Budget measures are subject to the passage of legislation. Consult your accountant before acting.

On negative gearing: if you owned the investment property before 7:30pm AEST on 12 May 2026, you are fully grandfathered — indefinitely. Your right to deduct rental losses against wage income is preserved regardless of how long you hold. Perpetual  ·  Baker McKenzie

On CGT: grandfathering is partial. Gains accrued up to 1 July 2027 use the old 50% discount. Gains accruing after that date use the new CPI indexation and 30% minimum rate. The longer you hold after July 2027, the higher the share of gain under the new rules. Government factsheet (PDF)

Check your contract date, not settlement date, to confirm your position.

The 50% CGT discount (the old method): hold an asset more than 12 months and only half the capital gain is assessable income. Simple and predictable. budget.gov.au

CPI indexation (the new method for post-Budget-night purchases): your cost base is adjusted upward for inflation each year. Only gains above the indexed base are taxable, subject to a 30% minimum rate on those gains. For very long holds with meaningful inflation, indexation can produce a lower tax bill than the 50% discount. For short-to-medium holds at typical inner-west price growth, the old discount was generally more favourable. Perpetual  ·  Baker McKenzie

Which is better for you depends on inflation rates, hold period, and your specific marginal rate. Your accountant can model both for your actual numbers.

You are fully grandfathered on negative gearing — your right to deduct rental losses against wages is preserved indefinitely. budget.gov.au

On the capital gain: a 2028 sale involves the split calculation. Of an 18-year hold (2010 to mid-2028), approximately 16.5 years sit before July 2027 (50% discount) and roughly 1.5 years after (new indexation method). The majority of your gain keeps the 50% discount. The tax impact of selling in 2028 versus 2026 is real but relatively modest given the short post-2027 exposure. Perpetual

Run the actual calculation with your accountant using your specific purchase price, current value, and expected selling price before deciding.

The $30,000 QLD First Home Owner Grant was introduced as a time-limited measure for contracts signed 20 November 2023 to 30 June 2026 inclusive. A Place to Call Home — $30k extension

The safest planning assumption is that $30,000 is the maximum available for contracts by 30 June 2026, after which the standard $15,000 rate applies. Confirm the current position with the Queensland Revenue Office before making any decision.

Yes — the contract date governs FHOG eligibility, not settlement. A contract signed on or before 30 June 2026 with a later settlement still qualifies for the $30,000 grant, provided all other eligibility criteria are met. The grant is typically paid at settlement, but eligibility is assessed at the contract signing date. QLD Govt — First home owner grant  ·  Queensland Revenue Office — eligibility

Important caveats: the grant still requires you to be a genuine first home buyer, intend to live in the property, purchase a new or substantially renovated home, and meet value thresholds (under $750,000 including land). Verify with your conveyancer and the QRO before relying on this.

Yes. Negative gearing is preserved for new residential builds purchased after 12 May 2026. If you purchase a new or off-the-plan residential property as an investment, you can continue to deduct rental losses against wage income from 1 July 2027 onward. budget.gov.au — Tax reform  ·  Pitcher Partners

The restriction applies only to established residential property purchased after 12 May 2026. On the CGT side, new-build investors may choose the 50% discount or the new CPI indexation arrangements — whichever is more favourable. Baker McKenzie

Confirm the precise definition of "new build" with your accountant once draft legislation is available.

Whether you need to restructure depends on your trust's distribution pattern and the tax rates of your beneficiaries. From 1 July 2028, distributions from discretionary trusts to family members face a 30% minimum tax rate. Rollover relief runs for three years from 1 July 2027. budget.gov.au  ·  NAB — Federal Budget 2026

If you have been distributing to beneficiaries who currently pay less than 30% tax, that advantage reduces or disappears from July 2028. If your trust's beneficiaries already face marginal rates of 30% or above, the practical impact is less significant.

Review this now, not in 2027. Trust deeds, distribution strategies, and structural decisions all take time. Speak with a trust law specialist and your accountant — this sits at the intersection of estate planning, tax law, and asset protection.

If your property was bought before 7:30pm on 12 May 2026, you are grandfathered on negative gearing. You do not need to do anything to preserve that status — it is automatic and permanent. Government factsheet (PDF)

On CGT: if you are considering selling in the next one to two years, the difference between selling before and after 1 July 2027 is worth calculating. Gains accrued before that date keep the 50% discount; gains after use the new method. Run the split calculation with your accountant. Perpetual

If you hold property through a discretionary trust, begin a structural review now — well before the 1 July 2028 effective date. budget.gov.au

Yes. Properties acquired before September 1985 (when CGT was introduced) were previously entirely outside the CGT system. From 1 July 2027, gains accruing after that date on pre-CGT assets will be taxed under the new indexation and 30% minimum rate method. budget.gov.au

If your family holds a pre-1985 property anywhere across Brisbane's Western and Centenary suburbs, the window for a CGT-free sale closes on 1 July 2027. This is not a three-month conversation — speak with an estate lawyer and accountant now. Gains accrued up to 1 July 2027 remain exempt; only gains arising after that date fall into the new regime.

No — if you are selling your principal place of residence, the main residence CGT exemption is fully intact. Every dollar of capital gain on a property that qualifies as your primary home is exempt from CGT. This was not changed by the 2026 Budget. You pay zero CGT on the sale. budget.gov.au

What does matter for you is market timing and pricing — and the budget's effects on the broader market are relevant context for that conversation. Speak with Cameron about what current vendor conditions look like in your specific street.

Budget announcements are not law until they pass both houses of Parliament. These measures were announced on 12 May 2026 and must still pass legislation. Budget measures are subject to the passage of legislation — consult your accountant and solicitor before making decisions based on these changes.

The QLD First Home Owner Grant at $30,000 is an existing state-level grant with a known end date — it does not require Federal Parliament. The 30 June 2026 deadline is a Queensland Government decision. Queensland Revenue Office